Shanghai Metals Market
Aluminum Buyers in Asia Seek Premium Cuts in 2012
Edited by : AL CIRCLE
2 min read
"We are certainly looking at two-digit premiums next year. Spot physical metal supply has risen and spot premiums have fallen," said a purchaser at a semi-finished aluminum products producer in Asia.
The firm also was worried that demand for aluminum products in the euro region and the United States would stay weak next year, cutting Chinese exports of semi-finished aluminum products and needs for primary metal imports, the purchaser said.
A manager for a fabricating plant in the southern Chinese province of Guangdong said the firm had not accepted an offer of a premium just above $100 for delivery in the first half of next year.
"Internally, we are bearish on next year's premiums because some LME stocks may come out and physical supply could rise," a trader at an international trading house said.
Traders said more than 1 million tonnes of global aluminum stocks were expected to be released from financing deals and the bulk could be removed to buyers' warehouses in the coming few months. Some metal was being offered in Asia, they said.
It is not clear how much of those aluminum stocks are in LME warehouses.
Aluminum stocks in LME-approved warehouses hit a record high above 4.71 million tonnes in May 2011, and stood at 4.56 million tonnes on Thursday. Analysts believe another 4 million to 4.5 million tonnes are held off the exchange.
Financing deals are said to have tied up about 70 percent of the stocks in LME-monitored warehouse.
The firm also was worried that demand for aluminum products in the euro region and the United States would stay weak next year, cutting Chinese exports of semi-finished aluminum products and needs for primary metal imports, the purchaser said.
A manager for a fabricating plant in the southern Chinese province of Guangdong said the firm had not accepted an offer of a premium just above $100 for delivery in the first half of next year.
"Internally, we are bearish on next year's premiums because some LME stocks may come out and physical supply could rise," a trader at an international trading house said.
Traders said more than 1 million tonnes of global aluminum stocks were expected to be released from financing deals and the bulk could be removed to buyers' warehouses in the coming few months. Some metal was being offered in Asia, they said.
It is not clear how much of those aluminum stocks are in LME warehouses.
Aluminum stocks in LME-approved warehouses hit a record high above 4.71 million tonnes in May 2011, and stood at 4.56 million tonnes on Thursday. Analysts believe another 4 million to 4.5 million tonnes are held off the exchange.
Financing deals are said to have tied up about 70 percent of the stocks in LME-monitored warehouse.
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