Research

Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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July 2019 | Aluminium Weekly Market Tracker


Primary and Secondary Fundamental Analysis


Analysis of consumption and production of primary aluminium, and an analysis of the market drivers of secondary aluminium and aluminium.

Demand Analysis:

LME proposed reform of its QBRC rule
A consultation process was launched by the LME on July 25 proposing significant reform to its warehousing system, and the consultation will be open until September 12, 2019. One of the reforms included in the proposal is relaxing QBRC (queue based rent capping) to 80 days, from the current 50-day limit.

Should this change be put in place, we believe it could be bullish for global aluminium premiums, which have become very sensitive to LME spread movements over the past year. The relaxation of the QBRC rule, if realized, will likely attract more metal on-warrant on the LME and as more metal is delivered into the system, could push LME aluminium spreads into wider contango and prevent persistent backwardations.

Wide contangoes in LME spreads highlight the expected increase in prices corresponding to the additional costs of financing and rent, so...

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