FOCUS: Will the 3% duty delta for aluminium Rotterdam premiums return?

The differential between duty-paid and duty-unpaid aluminium premiums in Rotterdam has been trading far below the traditional 3% duty delta for well over the past year and market participants are questioning if this is a new norm.

Fastmarkets assessed the aluminium P1020A premium, in-whs dp Rotterdam at $225-240 per tonne on Tuesday May 11.
On the same day, Fastmarkets assessed the aluminium P1020A premium, in-whs dup Rotterdam at $190-200 per tonne, putting the difference between the two premiums’ midpoints at just $37.50 per tonne.
“It is crazy when you look at the prices that the duty-paid is so low compared to duty-unpaid near $200 per tonne. Even when people are bullish duty-paid there seems to be a barrier to it rallying,” a European-based trader said.
“It makes you wonder how long it will be like this. Because even in a demand boom and global aluminium premiums at multi-year highs, duty-paid still lagged.”
If the market was trading at a 3% duty differential, the duty-paid premium would be close to $269 per tonne midpoint.

Fastmarkets recently heard some duty-paid deals as low as $206 per tonne...


Alice Mason

May 12, 2021

15:47 GMT