A wide contango in London Metal Exchange spreads supported aluminium premiums across the globe in the week ended Tuesday August 25, with only the premiums in Shanghai bucking the trend.
Rotterdam duty-unpaid premium at highest since MarchRestocking drives up premiums in BrazilImproved sentiment in JapanUS Midwest premium holds firmShanghai arb window closes.
Tight supply, wide contango spur Rotterdam premiums higher
Aluminium premiums in Rotterdam have increased to a fourth-month high, with a wide contango on the LME and supplies of physical metal tighter in the region.
Fastmarkets assessed the
aluminium P1020A premium, in-whs dup Rotterdam, at $95-105 per tonne August 25, up from $90-95 per tonne one week earlier. The increase brought it to its highest level since March 30.
A $40 per tonne contango on the LME aluminium cash/three-month spread was giving market participants little incentive to liquidate stocks, with some generating a profit just by carrying and financing stock.
"You're making $20 [per tonne] minimum against the carry, so unless someone pays you that $20 you make, why sell?" a trader in Europe...