NEW YORK In-warehouse
premiums for aluminum in London Metal Exchange warehouses in
Detroit have ticked up, with market participants agreeing to
pay more in order to secure metal as queues extend out to the
beginning of 2014.
The lengthening queues, combined
with rising stock levels, bumped daily in-warehouse premiums in
Detroit up to $160 to $190 per tonne this week from $140 to
$180 per tonne previously.
"I dont want premiums to
go up because I have to buy, but theyre higher," one
trader said. "Really the only metal is in Detroit, (and) $160
(per tonne) is the lowest bid. I would say offers are at $190
Global aluminum stocks in
LME-listed warehouses closed Monday at all time high of
5,172,500 tonnes after large deliveries into warehouses in
Detroit and Vlissingen, the Netherlands, according to data from
the exchange. Inventories in Detroit-registered warehouses
stood at 1,461,825 tonnes, with canceled tonnage at 814,550
"If I canceled today, I have to
pay for a years worth of rent. And if I have warrants,
Im going to offer to the biggest bidder. People will try
to use that logic to get $180 or $190 (per tonne)," a second
Paying to wait in long queues is
not an appealing option for consumers, with most choosing to
buy directly from the producers.
"How much of the metal (from
warehouses) actually gets to the consumer is the question," the
second trader said.