Cash Price of Aluminum Falls Into LME Backwardation

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Aluminum returned to backwardation this week a one investor held 50 to 80% of available aluminum contracts on the London Metal Exchange.

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The LME cash price has been flirting with backwardation for the last 2 months, sometimes at a discount, sometimes at the more usual premium. So this news ratcheted up market tension.

The week’s biggest mover on the weekly Aluminum MMI® was the aluminum cash price, which saw a 6.3% decline on the LME to $1,966 per metric ton. This comes on the heels of a 3.7% increase the week before. Following a 2.5% increase in the week prior, the 3-month price of aluminum fell 4.8% on the LME last week to $1,966 per metric ton. The Indian aluminum cash price fell 3.6% to INR 123.55 ($2.00) per kilogram after rising 1.9% the week before.

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Chinese aluminum prices were mixed for the week. The price of Chinese aluminum scrap rose 5.9% to CNY 12,600 ($2,049) per metric ton after falling 8.1% during the previous week. Chinese aluminum billet fell 2.1% over the past week to CNY 13,700 ($2,228) per metric ton. Following a 0.4% increase in the week prior, the cash price of Chinese aluminum fell 2.0% last week to CNY 13,450 ($2,187) per metric ton.

Prices for Korean 3003 coil premium over 1050 sheet remained constant, closing the week at KRW 3,740 ($3.39) per kilogram. Korean 5052 coil premium over 1050 sheet traded sideways last week, hovering around KRW 3,890 ($3.52) per kilogram. At EUR 2,954 ($3,694) per metric ton, the price of European 5083 plate did not change since the previous week. European 1050 aluminum remained essentially flat from the previous week at EUR 2,613 ($3,268) 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.

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