LME Cash–3M contango regains steepness as March-April spread loosens
March 9, 2019
The Cash–3M contango loosened to a two-week high of $27.50 from $25.00 per mton, as the March–April contango significantly widened to $13.50 from $11.25 per mton, and the April–May contango widened to $7.75 from $7.25 per mton. As a result, the Cash–3M contango is now wide enough for most players to profitably finance short-term cash-and-carry deals (supportive for spot premiums). Nevertheless, the LME Cash–March 20 (third-Wednesday) contango narrowed today to $0.75 per mton from a $1.00 per mton contango yesterday, signaling that risks of a nearby backwardation episode continue.