Arbitrage opportunity increases China’s aluminum imports

Aluminum Investing News reports despite increases in China’s aluminum imports, aluminum fundamentals look bleak.

 Imports in the country are rising due to an arbitrage opportunity as Shanghai Futures Exchange aluminum is selling at a premium of $400-$500 per tonne on the London Metal Exchange.  The price differential has been created as China’s State Reserve Bureau stockpiling has drawn down inventories.  Cancelled warrants for aluminum continue to rise at LME warehouses; last week the numbers indicated that another 5,300 tonnes of the metal was headed for China. Analysts expect the situation will extend through April. The strength expected in aluminum imports in the coming months follows China’s record trade volumes in the base metals complex in February. Refined copper and lead imports were the strongest on record, and refined zinc imports were the strongest since November 2005.  

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