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AL CIRCLE

Aluminium prices to rise further buoyed by Chinese stockpile and supply shortage

EDITED BY : 2MINS READ

LME aluminium prices are on the rise. After having taken a U-turn from last week’s temporary dip, the light metal is now again on an upward trajectory buoyed by growing stockpile in the Chinese market and concern hovering over an available supply shortage. After Friday’s night trading, the contract traded on LME closed at US$1,718.50/mt.

On Monday, November 7, LME aluminium is expected to drop below the 5-day moving average to US$1,705-1,725/mt, said SMM in an early morning forecast.

“Aluminium supply has increased this year as rising aluminium prices triggered release of new capacity and restarts of idled capacity. However, as we recently pointed out, there are other factors pushing aluminium prices up,” noted MetalMiner analyst Raul de Frutos.

Those factors include rising energy costs and strong demand.

“Industrial metals have been in bullish mode since early this year. Aluminium prices are finally jumping on the bandwagon. Aluminium buyers should minimize their price risk exposure if they haven’t done it yet,” writes Frutos.

News

LME aluminium premiums held grounds at their previous levels. The US premium stood at US$150, West-Europe premium was at US$80, East-Asia premium was at US$65, and South-east Asia premium was at US$15.
LME Official 3M Buyer price was recorded at US$1,721/mt and DEC1 Buyer price was recorded at US$1,750/mt.
Total opening stock at LME registered inventories stood at 2,13,2950 tonnes.

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In China, domestic primary aluminium price averaged Yuan 14,232.10/mt ($2,105/mt) over October 21-30, up 6.3 per cent from October 11-20, the National Bureau of Statistics said in a report. After Friday’s night trading, the contract closed at US$2,108/mt on Shanghai Metals Exchange.

According to SMM forecast, SHFE 1612 aluminium will test support at RMB 13,200/mt after meeting resistance at the 5 and 10-day moving average and move between RMB 13,180-13,380/mt on Monday, November 7.

In China’s domestic market, spot aluminium should trade at premiums of RMB 330-370/mt on Monday, said SMM.

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