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Door opens for $1,700 after bullish LME close; US LME buildups confirm collapse of MW premium and dilution of Section 232 tariff


Executive Summary

1. LME PRICE ALERT. As anticipated yesterday, LME prices posted the biggest two-week rally since April 2018, virtually completing a double bottom technical formation and opening the door for a new target near $1,700 per mton.

2. US MW PREMIUM ALERT. Baltimore LME buildups confirm collapse of MW duty-paid premium , Section 232 tariff dilution, and excess production of North American units.

3. EUROPEAN P1020 ALERT. Rotterdam P1020 premiums inch up further along with LME prices, restart of manufacturing activity, and attractive LME spreads.

4. LME Cash–3M contango has nearly halved in three weeks but remains profitable for cash-and-carry deals.

5. EUROPE WIRE ROD UPDATE. Mechanical sector among worst impacted by coronavirus pandemic. Europe’s green recovery plan expected to benefit EC wire rod demand.

6. China’s aluminum prices continue to approach medium-term resistance levels.

More details in full report.