LME aluminium spreads twist into backwardation; stockholders deliver

The London Metal Exchange cash-to-three-month aluminium spread settled in a $5/3.50 backwardation in the official session on Thursday October 30, compared with a $30 contango seen at the start of the month.

Aluminium spreads have tightened steadily in recent sessions as bidding covering the December-January period has intensified, and the cash-to-three-month spread has now moved into a backwardation for the first time since late August. The December-January spread has been prone to tightness in previous years as funds have moved to roll spread positions forward before the end of the year, but the recent bouts of tightness have also been viewed by some as a reflection of changing conditions in the physical aluminium market. “The aluminium market is structurally unbalanced, with the sheer tonnage of...


Mark Burton

October 30, 2014

15:35 GMT