The front-month aluminium contract on the SHFE last traded at 13,235 yuan ($1,855.41) per tonne on Tuesday May 26 while the LME aluminium three-month price closed at $1,506.50 per tonne on Friday May 22.
The arbitrage window to send metal to China opened for the first time since 2016 on May 6, registering a marginal profit of $4.22 per tonne, Fastmarkets’ price data shows. Profits have widened since then, reaching as high as $53.35 per tonne and $44.28 per tonne on May 18 and May 19 respectively.
Stronger macroeconomic indicators such as an increase in new home sales in China spurred a rise in the SHFE price, while the LME price fell because of weaker macroeconomic conditions
due to Covid-19-related lockdowns in the west.
Many traders told Fastmarkets that although some deliveries have gone to China, they do not expect the arbitrage...