P1020 premiums up, but demand lags

Jun 13, 2013 | 04:07 PM | Michael Cowden

Tags  Midwest premium, P1020, LME, London Metal Exchange, scrap, freight, aluminum, Mike Cowden

CHICAGO — Midwest P1020 aluminum premiums have inched up over the past week amid a combination of attractive warehouse financing deals, a tight scrap market and increased freight costs, market sources said.

But while market players contacted by AMM generally agreed that premiums had risen modestly, most also said demand from physical end-users hasn’t increased.

AMM’s Midwest premium range has moved to 11.6 to 12 cents per pound from 11.5 to 12 cents previously.

The biggest factor driving premiums upward is that warehouse financing deals are profitable because spreads on the London Metal Exchange are in contango, one trader said. "Demand is just average: not great, but not awful either," he said.....

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