LME aluminium on upward track; SHFE Aluminium plunges on poor market fundamentals

LME aluminium has picked up the pace. The light metal which was trending low a week ago has gained momentum on news that the OPEC countries may extend their oil output cut agreement. LME aluminium rose 0.25 per cent from its previous close of US$1938 per tonne to close at US$1,943 per tonne on Monday, May 22. Shanghai Metals Market forecasts that the contract will trade in the range of US$1,930-1950 per tonne on Tuesday, May 23.

As per Reuters’ analysis, LME aluminium price is likely to drop to US$1,918 per tonne as it seems to have peaked around a resistance at US$1,947 per tonne.

As on May 22, LME official cash buyer price of aluminium stands at US$1,941 per tonne, cash seller & settlement price is US$1,943 per tonne, 3M buyer price is US$1,941per tonne, 3M seller price is US$1,941.50 per tonne, Dec1 buyer price is US$1,967 per tonne, and Dec1 seller price is US$1,972 per tonne. The current LME official Opening Stock of aluminium is estimated at 1495350 tonnes, total Live Warrants is 964850 tonnes, and Cancelled Warrant is 530500 tonnes.

LME aluminium premiums, as on May 19, remain unchanged across major regions. LME Aluminium East-Asia Premium stands at US$110, LME Aluminium US Premium is US$215, LME Aluminium West-Europe Premium is US$95, and LME Aluminium South-East Asia Premium remains unchanged at US$15 (per tonne).

{googleAdsense}

The benchmark aluminium price at Shanghai Metal Exchange (SME) stands at US$2,002 per tonne on Tuesday, May 23, down 0.89 per cent from the benchmark aluminium price of US$2,020 per tonne on Monday, May 22.

At Shanghai Futures Exchange (SHFE), the most active aluminium future contract SHFE 1707 opened at RMB 14130 per tonne on Monday, May 22. Then the contract started falling and ended at RMB 13,990 per tonne. SMM predicts that poor market fundamentals will keep a lid on SHFE aluminium price rise. SHFE 1707 aluminium should range between RMB 13,900-14,080 per tonne on Tuesday, May 23.  

Spot aluminium in China market is expected to trade at discounts of RMB 110-70 per tonne over SHFE 1706 aluminium contract on Tuesday, May 23, SMM said.

The market focus will be on Markit’s preliminary manufacturing PMIs for France, Germany, the euro zone and the US in May, final Q1 GDP in Germany, and seasonally adjusted home sales in the US in April due for release today.