LME aluminium to see range-bound trading as the rising strength slows down

LME aluminium leapt to US$1,913 per tonne on Thursday's night trading reversing its temporary dip at US$1,910 per tonne on Wednesday as positions and trading volumes improved. However, market watchers believe that the contract has somewhat shed its rising strength. According to Reuters' analysis, LME aluminium is biased to break below a support at US$1,916 per tonne and fall towards the next support at US$1,891. Shanghai Metals Market foresees range-bound trading for the metal with a short-term uptrend. It says LME aluminium will move at US$1,920-1,950 per tonne on Friday, March 24.

As on March 23, LME official cash buyer price of aluminium stands at US$1,912 per tonne, cash seller & settlement price is US$1,913 per tonne, 3M buyer price is US$1,922.50 per tonne, 3M seller price is US$1,923 per tonne, Dec1 buyer price is US$1,958 per tonne, and Dec1 seller price is US$1,963 per tonne. The current LME official Opening Stock of aluminium is estimated at 1954650 tonnes, total Live Warrants is 1075150 tonnes, and Cancelled Warrant is 879500 tonnes.

As on March 22, LME Aluminium US Premium remains unchanged at US$215, LME Aluminium West-Europe Premium stands at US$95, LME Aluminium East-Asia Premium is US$100 and LME Aluminium South-East Asia Premium is US$15 (per tonne).

The benchmark price of aluminium on Shanghai Metal Exchange (SME) has experienced a drop. The contract is at US$1,958 per tonne on Friday, March 24, down 0.60 per cent from its earlier price of US$1,970 per tonne on Thursday.

SHFE 1705 aluminium traded on Shanghai Futures Exchange (SHFE) opened at RMB 13,830 per tonne on Thursday and then fluctuated at around the 20-day moving average. The contract closed at RMB 13,835 per tonne indicating at similar fluctuations during overnight trading. SMM forecasts SHFE 1705 aluminium will move at RMB 13,700-13,900 per tonne on Friday, March 24.

Spot aluminium in China's domestic market should trade at discounts of RMB 170-130 per tonne on Friday, forecasts SMM.

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Friday will see the release of March Markit manufacturing PMIs from Germany, France, Europe and US, US’s February durable goods orders statistics and France’s annual GDP in Q4. Market players will also keep an eye out for the output cut decisions of the OPEC members and rising US shale oil output along with the weakening oil prices, predicts SMM.