GLOBAL ALUMINIUM WRAP: US Midwest premium continues to climb, backwardation in LME spreads caps gains

Aluminium markets across the globe continue to focus on the eventual outcome of the United States’ Section 232 investigation into aluminium imports, but speculation-fueled increases in global premiums tied to the possible imposition of import tariffs have slowed amid a persistent backwardation in spreads on the London Metal Exchange.

  • US premium rises despite LME backwardation causing some traders to lower their quotations
  • Traders in Europe keep to the sidelines with caution over Section 232 a dominant theme
  • Talks for Q2 aluminium supply to Japan have begun, offers up approximately 30% from Q1
  • Brazil premiums track US Midwest premium’s upward momentum

Backwardation puts lid on US premium’s 232 push
The US Midwest aluminium premium rose again this week on continued speculation about trade action under the Section 232 investigation, but those gains were stymied by backwardation on the LME.
The US premium was assessed at 14-14.5 cents per lb on Tuesday February 27, up from 14-14.25 per lb a week ago.

The US market has essentially been split into two camps, according to market participants. One believes that President Donald Trump will enact trade remedies recommended by the US Commerce Department, and aluminium premiums will rise...


Shivani Singh

Echo Ma

Kirk Maltais

Vivian Teo

Justin Yang

February 28, 2018

03:40 GMT

New York, Singapore, Shanghai, London, São Paulo