Aluminium premiums rise in Europe on trader interest in cash-and-carry

Aluminium premiums in Europe have risen on increased interest in buying metal for financing deals after the October-November spread on the London Metal Exchange moved from backwardation to contango last week and the cash-to-three-month spread widened.

Buying material and then carrying it through a backwardation (in which nearby prices are higher than prices further forward) costs money, and the cost of rolling positions through the October-November period had previously discouraged traders from taking advantage of low premiums to pick up physical metal.
But with October-November prices trading in a contango (in which nearby prices are lower than those further out) and the cash-to-three-month spread widening, traders have become less reticent and premiums have moved up as a result.

Metal Bulletin assessed the duty-unpaid premium in Rotterdam at $80-100 on Monday October 26, up from...


October 27, 2015

10:55 GMT