A lack of clarity about the outcome of the Section 232 investigation and how long the backwardation in London Metal Exchange forward spreads will persist have led to an impasse in the European aluminium market, with bulls less confident than they were despite still-elevated premiums.
The P1020A in-warehouse Rotterdam duty-unpaid aluminium premium remained at a one-year high of $100-107 per tonne in-warehouse on top of LME cash prices, according to Metal Bulletin's assessment on Tuesday February 20, with participants more hesitant to do business.This has resulted in a significant decline in the number of transactions, bids and offers reported in the past sessions."I haven't been able to do anything this week. People aren't doing anything anymore," a trader in Europe said."We are in a wait-and-see situation," another said.The bullish tone, with bulls forecasting premiums to rise to $120 per tonne in the first quarter because of tight supply, has paused for now. Instead, most participants seem unsure about what positions to take - although supply is currently tight, it might not remain so for long if US import duties make Europe a more attractive destination or if LME spreads force stockholders to release units that are...