US Midwest Al premium falls on mart uncertainty

The US Midwest aluminium premium fell slightly on Friday October 9, after some traders revised offers down following a contraction on the London Metals Exchange's (LME) aluminium spreads and an uncertain market outlook.

Fastmarkets assessed the aluminium P1020A premium, ddp Midwest US at 12-13.5 cents per lb on October 9, down 3.7% from 12.5-14 cents per lb where it had been steady for over a week.
Offers were heard in a 2-cent range, ranging from the low end of the assessment and above it.
While spot activity remained quiet, market uncertainty grew due to speculation about the impact several factors could have on the premium.
One of those factors is the tightening of LME spreads.
The LME's aluminium cash/three-month spread tightened to a $15-per-tonne contango this week, after sustaining a near $40-per-tonne contago for months.
Some traders suspect that the narrower spread will spur sellers to liquidate metal.

"The shrinking contango is clearly going to make traders [who are] long on units in a falling premium market really think about...

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