LME Cash–March tightness eased, but risks of potential backwardation episodes persist (would be bearish for spot premiums)
March 8, 2019
The LME Cash–March 20 (third-Wednesday) contango widened today to $1.00 per mton after flattening yesterday to a spread of zero. Meanwhile, the Tom–Next spread returned to a contango of $1.50 per mton from yesterday’s backwardation of $5.00 per mton, but experienced intraday “backs” as wide as $0.45 per mton. However, risks of nearby backwardations persist as live warrant holdings and short March positions appear to remain relatively concentrated.
More details in full report.