Don’t expect premiums to lower, at least, so says Rusal. “Physical prices of aluminium in Europe will stay at high levels this year as financing deals squeeze the availability of metal on the spot market, Rusal Deputy Chief Executive Oleg Mukhamedshin said on Thursday,” reports Reuters.
“European aluminium premiums, which cover the cost of freight and insurance and reflect regional demand and supply, were around $350-$370 per tonne, Mukhamedshin told Reuters in an interview. Premiums are paid over the LME cash price .”
“‘You have quite a deficit of metal in the spot market, but you also have huge pressure from financial players…, so that’s why you have this discrepancy,’ he said.”
“Premiums in Europe, and the United States, had hit record highs, highlighting the London Metal Exchange’s (LME) limited ability to cool a market where low interest rates whet appetites for locking up aluminium as an investment.”
“Inventories of aluminium in LME-monitored warehouses are at a record high of more than 5 million tonnes, but most of it is tied up in financing deals creating a deficit. Another 4.5 million tonnes is sitting off exchange, Mukhamedshin said.”
“We don’t seen any reason why the premiums should go down, because this metal is still trapped in financial deals, interest rates are quite low, the contango is positive and investors continue to make money,” he said.
In metal price news for aluminum…
European 5083 plate improved by 3.6 percent on the weekly Aluminum MMI®. European 1050 aluminum rose by a slight 0.6 percent. Korean 3003 coil premium over 1050 sheet remained unchanged for the week. Korean 5052 coil premium over 1050 sheet traded sideways last week.
Chinese aluminum prices were mixed for the week. The cash price of Chinese aluminum fell 1.0 percent for the week to settle. Chinese aluminum bar remained essentially flat from the previous week. Chinese aluminum billet prices held steady from the previous week.
With a 0.9 percent decrease, the Indian aluminum cash price closed the week. The cash price of primary aluminum rose 0.4 percent on the LME over the past week to $1,741 per metric ton. This was the fourth week in a row of increasing prices. The aluminum 3-month price increased 0.3 percent on the LME this week, closing out the fourth consecutive week of rising prices at $1,786 per metric ton.
The Aluminum MMI® collects and weights 12 global aluminum price points to provide a unique view into aluminum price trends. For more information on the Aluminum MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.