Backwardation spurs decline in Rotterdam premiums.
Scrap availability and LME spreads keeps US premium at its lowest since 2018.
Brazil domestic premium hits two-year low amid lackluster demand.
Premiums in Japan stable, with participants saying floor has potentially been reached.
Backwardation restarts Rotterdam aluminium premiums’ decline
The emergence of a backwardation on the benchmark aluminium LME cash/three-month spread added further downward pressure to premiums in Europe over the past week.
Fastmarkets assessed the aluminium P1020A premium, in-whs dup Rotterdam at $85-95 per tonne Tuesday November 5, widening downward by $5 from $90-95 per tonne a week earlier, with the nearby backwardation cited as a primary reason for the decline.
The spread flipped from a contango to a backwardation on Monday, before widening to around $6.25-per-tonne backwardation on Tuesday. Meanwhile, the December/January spread widened to a $16.25-per-tonne backwardation.
“The premium is moving in line with the backwardation,” one trader in Europe said.
Market participants expect further...