Week in Review: Aluminum Premiums Skyrocket, Glencore’s Role

by on

rencen

Apparently it’s very expensive to get out of Detroit.

That is, if you’re buying aluminum from an LME warehouse.

As Stuart reported earlier this week, the total cost of getting aluminum out of Detroit comes to around $315 per ton. (The rent on a ton of aluminum canceled today would be around $275, until it is ready for loading onto a truck, which will cost another $39.95.) Of course, the wait to actually get the metal in your hands is roughly 410 working days – or 650 calendar days, Morgan Stanley estimates.

So what does this have to do with premiums (which have blown up to $0.19 per pound)?

Chart of the Week

Alu Premiums

Source: Reuters

The bump in premiums have less to do with smelter closures and more to do with LME queues and the stock-and-finance game.

Essentially, with “queue revenue at $315/ton and the physical premium at $419/ton, the apparent linkage between the two seems to have broken down…underlining the warning for consumers that the premium is not going to dissipate once the new [LME] rules come into force in April.”

Get the full skinny here:

More Key Stories

mmphoto6

Asia vs. US in Steel Market Wars – does it come down to discipline?

Prices for the last member in the base metals alphabet – zinc – are looking at better days.

Cutting through confusion on the Indonesian export ban – when will nickel prices be hit?

Metal Service Centers, Unite!

top25

MetalMiner is getting set to release a buyer’s guide to the Top 25 Metal Service Centers in the United States – should your service center be on the list? Learn more about the impetus for this project here, but if you’d like to complete the survey to be included in the guide, fill out the quick form below!

       
       
       
       
       
       
           captcha
           
           
       

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.