March 27, 2019
The LME Cash–3M contango narrowed to a one-week low of $23.50 from yesterday’s $29.00 per mton, mainly as the April–May contango experienced a significant tightening to $2.75 from $6.00 per mton, as the backwardation in the May 7–10 period intensified to $6.00 from $3.00 per mton. Additionally, the May– June contango narrowed to $8.00 from $9.75 per mton. As a result, we estimate that the Cash–3M contango is barely attractive for cash-and-carry deals, even for the most competitive players (i.e., those with access to the lowest financing and storage costs).
More details in full report.