March 12, 2019
The LME Cash–3M contango tightened to $25.50 from yesterday’s three-weak peak of $30.25 per mton. Today’s narrowing was mostly a result of the April–May contango tightening to $4.00 from $6.75 per mton and the March–April contango tightened to $11.75 from $12.50 per mton. The Cash-March contango narrowed as well to $2.50 from $3.00 per mton. Nevertheless, the Cash–3M contango remains wide enough for most players to profitably finance short-term cash-and- carry deals (supportive for spot premiums). Risks of nearby backwardations ahead of March have moderated amid the absence of a dominant warrant holder and more balanced futures positions.
More details in full report.