March 29, 2019
The April–May spread returned to contango, settling today at $1.00 per mton from a backwardation of $0.50 per mton the prior two sessions. The lingering “back” in the first week of May (7–10) eased today to $9.50 from a previous $11.00 per mton. Meanwhile, the May–June contango widened to $9.75 from $8.50 per mton, while the Cash–April contango slightly narrowed to $7.25 from $7.50 per mton. As a result, the Cash–3M contango widened today to $19.00 per mton from a two-month low of $16.75 per mton. Nevertheless, we estimate that for most players the Cash-3M contango is not yet supportive for cash-and-carry deals (which remains bearish for spot premiums).
More details in full report.