Midwest premiums said on shaky ground

Jul 19, 2013 | 08:55 AM | Michael Cowden

Tags  aluminum, Midwest premium, P1020, LME, London Metal Exchange, warehouse rules, Michael Cowden

CHICAGO — Midwest aluminum premiums held mostly steady in the past week but remain pressured as debate lingers over when—and to what extent—they might fall due to proposed changes in London Metal Exchange warehousing rules.

While concerns have been raised about the impact of the LME proposal, aimed at reducing long lines at some warehouse locations (amm.com, July 1), market sources agreed that a cap had been placed on premiums until the effects are clear.

AMM’s spot premiums for P1020 remain unchanged at 11.75 to 12 cents per pound.

"Premiums are going to be under pressure. There’s no question about it. But it probably won’t happen overnight. All we know is (premiums) aren’t going to go any higher," one market observer said, adding that primary scrap grades are in short supply and buyers are hard-pressed to find prompt metal at a discount.....

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