FOCUS: China’s aluminium import arb window likely to remain open until end of May, analysts say

China’s import arbitrage window for aluminium may remain open until the end of May amid expectations of a stronger price performance on the Shanghai Futures Exchange relative to that on the London Metal Exchange, Fastmarkets understands.

“I think the import window won’t close in the short term because the Covid-19 pandemic overseas has not yet reached a turning point. You can see that LME stocks are rising and macroeconomic data for ex-China regions is not good either. The US dollar also remains in high ground, which could continue to pressure LME prices,” Fastmarkets aluminum analyst Cao Yang said on Tuesday May 19.
“Although prices in China may come down again due to the increase of local production capacity, which will lead to a decline in the Shanghai-London ratio, it should not happen in the short term,” Cao added.
Economic activity across Europe and the United States has suffered amid the ongoing Covid-19 pandemic, demonstrated by weak macroeconomic indicators in both regions in recent months.

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Hui Li

May 20, 2020

08:01 GMT