Premiums for P1020-grade aluminium in Rotterdam have fallen in the week to Thursday October 8, with recent stock cancellations and a Covid-19-related lockdown in Port Klang, Malaysia, creating narrower spreads on the London Metal Exchange.
Fastmarkets assessed the
aluminium P1020A premium, in-whs dup Rotterdam, at $110-120 per tonne on Thursday, down from a two-year high of $115-120 per tonne last week, and with bids received as low as $95 per tonne.
Market participants told Fastmarkets that premiums could fall even further in the next few days, with some offering metal now at around $105 per tonne and bids reported even lower.
Significantly narrower LME spreads were among the primary drivers of the decline, with the benchmark cash/three-month spread narrowing to a $12.75 per tonne contango during early-morning trading on Thursday, from $37 per tonne on September 25.
The spread later rebounded slightly to $15.25 per tonne contango. But this level still made holding on to metal less profitable, and gave more incentive for market participants to start selling at lower premiums.
"People are offering material now at low numbers," a trader said....