Re-emergence of a dominant LME warrant holder supportive of continued tightness

The LME Cash–3M contango eased today to a one-week peak of $26.00 from yesterday’s $24.25 per mton, as the April-May contango widened to a one-week peak of $5.50 from $3.75 per mton and the May–June contango widened to $9.25 from $8.25 per mton. As a result, the Cash–3M contango is now wide enough for most players to profitably finance short-term cash-and-carry deals (supportive for spot premiums). However, the re-emergence of a dominant warrant holder signals risks of tightening spreads ahead.

More details in full report.