STEELGURU
European duty paid aluminum premium falls after 6 months at record high
Edited by : AL CIRCLE
2 min read
European aluminum premiums moved down on October 13th 2011 with duty paid metal sliding USD 5 per tonne as spot market demand dried up on a lack of clarity over end user demand.
MB’s duty paid, high grade cash premium fell to USD 185 per tonne to USD 205 per tonne from USD 190 to USD 210, the latter being its record high and the level at which the premium has stood since April 27.
A trader said that paid material, due to the uncertainty over the final market in Europe is starting to drift lower. Some consumers are knocking back demand leading to more material on the spot market and premiums are starting to soften.
Aluminum has remained relatively robust in the face of growing economic uncertainty in the euro zone with contracted volumes still moving to consumers and prices holding up well compared with other base metals.
Three month aluminum settled at USD 2,209/09.5 per tonne in the official session on the London Metal Exchange on October 13th 2011 from USD 2,436/37 at the start of September. But, lacking assurances of end-user demand over the medium term few buyers are active in the spot market.
A second trader said that the situation is amplifying. More people want to sell and less to buy, so there’s some pressure. But look at the consumers the big difference between now and 2008 is that they’re still going. The huge drop in demand won’t happen again. Though most business reported to MB went at a premium below USD 200 per tonne some market participants are still reporting sales above that level.
Meanwhile, duty unpaid material remained at USD 120 per tonne to USD 140 per tonne, a level that has been bolstered by the incentives offered this year by warehouse companies to put metal in their sheds.
The first trader said that unpaid is rock steady, underpinned by a very bullish tender in Brazil. The 14,000 tonne tender was won at a price that nets back to an in warehouse Rotterdam level at the top of the premium range. The market is softer at the moment, but that’s not to say things won’t pick up again soon.
MB’s duty paid, high grade cash premium fell to USD 185 per tonne to USD 205 per tonne from USD 190 to USD 210, the latter being its record high and the level at which the premium has stood since April 27.
A trader said that paid material, due to the uncertainty over the final market in Europe is starting to drift lower. Some consumers are knocking back demand leading to more material on the spot market and premiums are starting to soften.
Aluminum has remained relatively robust in the face of growing economic uncertainty in the euro zone with contracted volumes still moving to consumers and prices holding up well compared with other base metals.
Three month aluminum settled at USD 2,209/09.5 per tonne in the official session on the London Metal Exchange on October 13th 2011 from USD 2,436/37 at the start of September. But, lacking assurances of end-user demand over the medium term few buyers are active in the spot market.
A second trader said that the situation is amplifying. More people want to sell and less to buy, so there’s some pressure. But look at the consumers the big difference between now and 2008 is that they’re still going. The huge drop in demand won’t happen again. Though most business reported to MB went at a premium below USD 200 per tonne some market participants are still reporting sales above that level.
Meanwhile, duty unpaid material remained at USD 120 per tonne to USD 140 per tonne, a level that has been bolstered by the incentives offered this year by warehouse companies to put metal in their sheds.
The first trader said that unpaid is rock steady, underpinned by a very bullish tender in Brazil. The 14,000 tonne tender was won at a price that nets back to an in warehouse Rotterdam level at the top of the premium range. The market is softer at the moment, but that’s not to say things won’t pick up again soon.
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