The spread widened to a contango of $18.35 per tonne on Tuesday August 12, from a low of less than $5 on August 8. It narrowed back to $16 on Wednesday but widened again to $17 on Thursday.
The spread initially began tightening in mid-June, when it stood at more than $44 per tonne. As metal was delivered out of LME-listed warehouses and into off-warrant sheds, those stocks became less visible and the apparent lower availability supported base prices, tightening nearby spreads and reducing the contango.
Three-month aluminium prices settled at $2,050.50/051 per tonne on August 12 – the highest level since February last year.
But the traditional response to looming backwardations on the LME forward curve – fresh deliveries into warehouses and falling premiums – has not been seen over recent...