GLOBAL ALUMINIUM WRAP: Brazil main ports premium moves for first time in three months; backwardation dents Rotterdam premiums

Aluminium premiums around the globe were on divergent paths in the week ended Tuesday March 10, with rates in Brazil rising on improved demand but falling in Rotterdam due to an intermittent backwardation in London Metal Exchange price spreads.

  • Eyes on virus outbreak in Italy.
  • Improved demand in Brazil.
  • Lower consumption pushes South Korean premiums down.
  • Premiums static in the United States.

Rotterdam aluminium premiums edge lower amid backwardation
Aluminium premiums in the Dutch port of Rotterdam edged lower on Tuesday, following the emergence of an intermittent backwardation in the LME’s aluminium April/May spread and bearish sentiment surrounding physical demand due to the outbreak of novel coronavirus (2019-nCov) in the region.
Fastmarkets assessed the aluminium P1020A premium, in-whs dup Rotterdam at $100-110 per tonne Tuesday, down by $3-5 per tonne from $105-113 per tonne a week earlier.
The April/May spread, trading as wide as a $1 per tonne backwardation on Tuesday afternoon in London, was the primary driver for the move for most participants. A backwardation makes it costlier for some participants to hold on to metal and incentivizes them to liquidate metal.

“April/May could be...

Published

Justin Yang

Alice Mason

Karen Ng

Renato Rostás

Michael Roh

March 11, 2020

10:15 GMT

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