LME cash-3 month contango plummets to multi-year low

摘要

The US delivered LME all-in price has risen to average $2,450/t in early August, driven by a rally in the LME price and slight uptick in ingot premiums. In China, the SHFE price rally has been dampened by smelter restarts and faster than expected ramp ups of capacity in Xinjiang and Shandong provinces. The LME-SHFE price arbitrage has risen and this will support increased exports of CC (continuous cast) coil in H2. The LME cash-3 month contango dropped to a low of $2/t on 11th August as two long positions in August pushed the near-term forward spread into backwardation. CRU believes large financing deals will not be exposed to this backwardation as positions have already rolled forward. The LME has begun to publish its Commitment of Traders report which reveals short/long positions of market participants in the market on a given date. CRU has conducted an in depth analysis of the data which reveals that money managers increased long positions in the second week.