Aluminium premiums in China retreat amid thin trading

Aluminium premiums in China moved down to $355-370 per tonne this week, amid limited import interest, with traders eyeing carrying trade opportunities.

The range fell lower than the premium of $370 per tonne in March, although trading was thin.

"There have been almost no offers or bids recently, as the price gap between the global and Chinese markets is huge," a major trader said.

"We have very little aluminium on hand to sell at the moment and no one wanted imported aluminium because it would result in a loss of over 2,000 yuan ($324) per tonne," the trader said.

Another trader said he was offering $370 per tonne, but admitted it was "very hard" to reach any deal at the level.

The three-month London Metal Exchange aluminium settled at an official price of $1,840/40.50 per tonne on Monday April 28. The Shanghai Futures Exchange July aluminium contract closed at 13,535 yuan per tonne on Monday April 28.

Another major trader also said they didn't have any spot material to sell.

"All aluminium has gone to Japan and there is no one in China buying imported aluminium," he said.

For the second quarter, major Japanese ports aluminium premiums reached $365 per tonne.

Market participants are more interested in carrying trade.

"We are looking for stuff piled up in Shanghai bonded warehouses, so that we can export them to other ports," the first trader said.