ALUMINIUM ARB INDICATOR: Import window widens slightly on falling LME Al price, freight rates

The aluminium import arbitrage between the United States and Asia widened slightly in January due to lower London Metal Exchange prices and cheaper freight and barge rates.

The differential between canceling aluminium without the 10% Section 232 tariff from London Metal Exchange-listed warehouses in Asia and shipping the material into the US Midwest also widened by up to $5 per tonne some locations. But for material with the 10% duty, the arbitrage window widened $12 per tonne in almost all locations. “The arbitrage has widened owing mainly to a combination of a lower underlying LME price and a stronger Midwest premium assessment with some compensating variables in the form of fot [free-on-truck], ocean freights and barge rates,” a market source said. The three-month LME aluminium price traded below $1,900 per tonne for the majority of January, hitting a low of $1,785.50 per tonne at the beginning of the month. A persistent backwardation in LME spreads...

Published

Alice Mason

February 06, 2019

12:19 GMT

London