Uptrends in the spot aluminium premiums in Rotterdam have faltered with backwardations in the London Metal Exchange December/three-month and January/three-month spreads starting to put material pressure on the physical market.
Fastmarkets assessed the benchmark aluminium P1020A premium, in-whs dup Rotterdam at $100-110 per tonne on Friday September 20 from $105-115 per tonne the day before where it had been steady at that level since the September 3. The premium had been on a steady uptrend since early May. Friday's decline was the first downtrend for the premium since April 25. Since then, the premium has largely been supported by wide contangos on LME spreads. Throughout much of the third quarter 2019, participants have been able to carry metal, with the contango covering financing and rent charges. That drove the rise in duty-unpaid premiums. The trend has shifted though, with forward months including January now in a wide backwardation. Bearish demand expectations for the coming months have started to stir more bearish sentiment among market participants in the past week. "People got too...