March 20, 2019
The LME Cash–3M contango widened to $24.25 from yesterday’s $24.00 per mton, mainly as a result of a slight easing in the April–June segment; the April- May contango widened to $3.75 from $3.00 per mton (as the May 7–10 backwardation eased to $5.00 from $7.00 per mton), and the May–June contango widened to $8.25 from $7.50 per mton. Meanwhile, the Cash–April contango slightly narrowed to $13.25 from $13.50 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.