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Banks offer large aluminum volumes

Keywords: Tags  aluminum, banks, hedge funds, clips, London Metal Exchange, LME, Midwest aluminum premium, duty-unpaid aluminum European premium

LONDON — Banks and hedge funds are offering large volumes of duty-unpaid aluminum as they seek to reduce their positions, traders told AMM sister publication Metal Bulletin.

"We’re in touch with the banks, which we see offering huge tonnage—10,000-tonne clips—particularly in Asia and North America," one aluminum trader said.

Offers to his trading company have increased sixfold since the London Metal Exchange said in July that it proposes to tie warehouse load-in rates to load-out rates starting in April to ensure that queues in licensed warehouses fall to less than 100 days, the trader said.

This initially pressured European premiums, although the tight European scrap market, wide contango and the continued existence of the queues have mitigated the downward movement. Duty-unpaid premiums in-warehouse Rotterdam fell to $170 to $197 per tonne Sept. 27 from $175 to $205 previously as business could no longer be concluded above $200 per tonne.

U.S. Midwest aluminum premiums also edged down this past week due to a stalemate between buyers and sellers caused in part by uncertainty over proposed LME rule changes (, Sept. 26).

A version of this article was first published in AMM sister publication Metal Bulletin.

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