Midwest P1020 aluminum premiums tumble

Aug 14, 2013 | 05:55 PM | Michael Cowden

Tags  Aluminum, Midwest premiums, P1020, CFTC, LME, lawsuits, banks, warehouses Michael Cowden

CHICAGO — Midwest aluminum premiums tumbled this week due to uncertainty about the potential fallout from increased regulatory scrutiny of U.S. banks’ physical commodities businesses, warehousing policies and the potential for increased market volatility.

AMM’s spot premiums for P1020 dropped to 11.4 to 11.85 cents per pound from 11.7 to 12 cents previously.

“Everyone is very cautious,” one trader said. “Premiums have definitely been capped. How quickly they will come down and how much is still in question.”
The trader and other market sources had several concerns, chief among them a rumored U.S. Commodity Futures Trading Commission (CFTC) probe into big banks and warehousing firms (amm.com, July 22). ....

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