Backwardations create uncertainty in Europe
- Uncertainty in Europe due to spreads
- Import premium widens in Brazil
- US Midwest market quiet
- Domestic market more favorable in Japan.
Aluminium premiums throughout Europe continued to have good support from tight availability of metal across the continent, but uncertainty was growing about whether that trend would persist, due to narrow LME spreads.
Fastmarkets assessed the aluminium P1020A premium, in-whs dup Rotterdam
, at $110-115 per tonne on Tuesday, flat from the week before.
Tuesday’s session was particularly liquid, with deals above and below the range. Market participants were divided over the direction in which the premium would move due to the backwardation.
“I’m not going to be a buyer at these levels with these [backwardations],” a Europe-based trader said.
“Everyone is still posturing. After January-February, when I think it will fade, we’re going to see some units come on in South East Asia,”...