FOCUS: Open Chinese arbitrage window could drive MJP Q3 premium to 6-year high

May 22, 2021 / www.metalbulletin.com / Article Link

Japan's third-quarter aluminium quarterly benchmark looks likely to cross another six-year high after offers were heard at $180-190 per tonne earlier this week, primarily supported by the open Chinese arbitrage window.

The arbitrage window to ship aluminium to China has been widening since it opened on April 29, with Chinese importers standing to gain a profit of $63.59 per tonne on May 20 for every tonne of aluminium brought in, according to Fastmarkets calculations. A month earlier, on April 20, the import arbitrage was at a loss of $22.94 per tonne.
Market participants said that the open arbitrage window could have pushed negotiations to start barely a month-and-a-half after the conclusion of second-quarter talks, with producers wanting to ride on the bullishness of Chinese aluminium premiums.
Offers were heard for the third-quarter MJP premium on Monday May 17 at $180-190 per tonne, with the very first offer heard on Monday at $185 per tonne - 24.6% higher than the cif MJP premium for the second quarter, which settled at $148-149 per tonne.

Another offer was heard later in...

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