
The US dollar weakened after progress in Brexit negotiations between the European Union and Britain. Base metals rose across the board and LME aluminium grew over 1% and SHFE aluminium closed higher.
LME aluminium closed the day’s trading at US$ 1851 per tonne yesterday. Then the contract slid and returned to the five-day moving average after a lower US dollar lifted it to a high of US$1,881.5 per tonne overnight. It closed at US$1,877.5 per tonne. We expect it to test pressure at the 40-day moving average today, with trading range at US$1,840-1,900 per tonne.
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As on March 12, LME aluminium cash (bid) price stood at US$ 1850 per tonne, LME official settlement price stands at US$ 1851 per tonne; 3-months bid price stands at US$ 1877 per tonne, 3-months offer price is US$ 1878 per tonne; Dec 20 bid price stands at US$ 2012 per tonne, and Dec 20 offer price stands at US$ 2017 per tonne.
The LME aluminium opening stock dropped to 1205725 tonnes. Live Warrants totalled at 653575 tonnes, and Cancelled Warrants were 552150 tonnes.
LME aluminium 3-months Asian Reference Price is hovering at US$ 1862 per tonne.
SME and SHFE Aluminium Price Trend
The benchmark aluminium price on Shanghai Metal Exchange slightly increased to US$ 2024 per tonne today from US$ 2009 per tonne on March 11.
The SHFE 1905 contract shrugged off pressure from the 40-day moving average in early trades, and continued to increase to an intraday high of RMB13,565 per tonne at noon yesterday. It closed at RMB 13,520 per tonne, with open interests down 4,988 lots as shorts exited. As base metals rose across the board, the SHFE 1905 contract jumped above all moving averages, to a high of RMB 13,595 per tonne, before it ended at RMB 13,580 per tonne. It is likely to trade at RMB 13,400-13,800 per tonne, with spot offers at a discount of RMB 40 per tonne to flat against the SHFE front-month contract today.
As social inventories of primary aluminium stemmed increase, and supportive policies like tax cuts bolstered demand, aluminium prices are expected to rebound in the short term.
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