Metals Update

The 2nd week of 2024 saw the beginning of the Index reweighting. Aluminium, with market on close selling alongside additional CTA weight created a pullback to lows of $2227 ($171 retracement from 02/01 highs).

In fundamental news, Alcoa announced this week a plan to fully curtail production at the Kwinana alumina refinery in Western Australia by the end of Q3, citing the facilities age, operating costs, current bauxite grades, in addition to current market conditions as basis for the decision.

CME european premiums on nearby tenors have been rising of late and the volume seems to be concentrated around there. Furthermore, a handful of participants show a short 5-9% on the banding report – with LME AH Feb Mar steadily tightening with a healthy turnover to go with it – therefore not signalling a recovery in demand, but rather suggesting a positioning imbalance.

By Rachael Cotgreave, Mark Hamblin and Jake Constable

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