April Aluminum Update

  • 14 May 2018
  • By CME Group
  • Topics: Metals

Aluminum Updates

  • On Friday, April 6, the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury imposed new sanctions targeting seven high-profile Russian businessmen, 12 companies they own or control, and 17 senior Russian officials because, it said, they were profiting from a Russian state engaged in “malign activities” around the world. Oleg Deripaska, conglomerate EN+, which in turn is the co-owner of some of the world’s largest metals producers, Rusal (6% of the world’s aluminum). [Sources: U.S. Department of the Treasury, Reuters]
  • On April 10, COMEX revoked the approved status for registration (warranting) and delivery of the aluminum brands produced by Rusal against the exchange’s Aluminum futures (ALI) contract with immediate effect. See the list of the brands.
  • Open interest across all COMEX Aluminum products remained close to historical highs, reaching 71,808 contracts on April 30. The volume continued to increase across all Aluminum Premium futures along the curve, with open interest across all non-U.S. Aluminium Premium contracts staying well above 10K contracts.
  • Aluminum MidWest U.S. Transaction Premium Platts futures have become increasingly volatile in the last couple of months as market participants reacted to U.S. sanctions imposed on Rusal. The May contract traded in a wide range from the low of 0.1525 $/lb (26-27 March) to the high of 0.2210 $/lb (11 April). The average daily volume year-to-date remained robust at 615 contracts (15.4K mt)
  • Alumina prices soared in April following disruptions across the whole physical aluminum supply chain due to the sanctions on Rusal. Alumina FOB Australian (Platts) May18 futures soared from $430 to nearly $600 per mt (+40%) since the end of March as 205K mt of Alumina FOB Australian (Platts) futures traded in April. [Source: Reuters]
  • The revocation of several brands approved for delivery against the contract resulted in a decline of 42,469 MT of Aluminum held in exchange-approved warehouses on April 10.  Aluminum held in exchange-approved warehouses totaled 10,788 MT as of April 30.

Aluminum Premium Futures Price Performance:

  • Regional Aluminum premium futures are driven by the different fundamental factors, thus, creating arbitrage opportunities.

Aluminum Premium Futures Month-on-Month Change in Forward Curve and Open Interest


Monthly Aluminum premium volumes


Aluminum Inventory Movements

Date Total Inventory Eligible Registered
4/28/2017 37,304 28,675 8,629
3/29/2018 55,266 55,215 51
4/30/2018
10,788

10,737

51
MoM Change, % -80% -81% 0%
YoY Change, % -71% -63% -99%

Source: Bloomberg. Data as of 01 May 2018


Disaggregated Commitment of Traders Report


Alumina Futures


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