The price of aluminium is at its highest mark since late March, boosted by stimulus worldwide when China announced in early September that it was spending on a fresh infrastructure program.

There was monetary stimulus from the USA's Federal Bank on September 13 when it unveiled its third round of quantitative easing (QE3) extending its view that short-term interest rates are likely remain close to zero from 2014 to mid-2015.

According to O'Carroll, "With the swift rise in aluminum prices, the contango has narrowed noticeably." He said that the spread between the cash and the three-month price had been running around $35/mt for most of August. But over the past few weeks it has declined to near zero.

"We expect a more normal contango of around $30/mt to re-emerge in the near-term. In our view, the fundamentals, while improving, are not strong enough to push the market into backwardation for an extended period of time," he said.