P1020A aluminium in Rotterdam on a duty-unpaid basis fell to $120-135 per tonne on Wednesday May 23 from $125-140 per tonne on Tuesday. The benchmark premium has fallen nearly 20% since the start of the month.
Nearby spreads on the London Metal Exchange are in a wider and more stable contango, with the cash/three-month spread at an $8.50 per tonne contango, which is usually more supportive of premiums.
Still, the volatility the benchmark spread experienced has forced the market to start looking at spreads in more forward months.
On April 6, before the sanctions were announced, the benchmark spread was...