May 2012 | Base Metals
Premiums hit new highs on growing stock bottlenecks: Aluminium - Market Analysis
Sentiment across the base metals picked up last week, which halted the earlier slide in prices. Spot premiums continue to rise, reaching record high levels in the US. This will no doubt help marginal smelters stay in production, encourage new capacity to come on stream and see idled capacity reactivated. All of this will result in the aluminium market fundamentals deteriorating further when cutbacks are what is really needed.
Two-way stock activity
The pace of metal leaving LME warehouses remains steady, averaging 10,840 tpd last week compared with 9,550 tpd the week before. As well as seeing the regular large outflows from Vlissingen, Johor, Detroit and Baltimore (related to stock financing activity), there are regular smaller outflows from a broad range of locations, which suggests more genuine consumer demand. The...
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