HOTLINE: Aluminium contract question splits market

In 2012, aluminium’s mating season was delayed until the very end of the year as producers pushed for contracts with floating-rate premiums, so as to benefit from any further increases in premiums that had already reached record highs.

This year, premiums are falling and producers are attempting to push their customers back onto fixed-rate contracts. As the year-end approaches, it remains to be seen how successful that attempt will be. Certainly there are few indications.

In a poll, 56% of Metal Bulletin readers said that consumers would successfully resist attempts to return to fixed-premium contracts, while the remaining 44% said the producers would be the successful ones.

With so much uncertainty over forward premiums ahead of the London Metal Exchange’s announcement on its proposed changes to warehouse load-out rates, Hotline wonders how closely the poll results align with the numbers of producers and consumers that answered the question…