Both LME and SHFE aluminium closed lower yesterday; likely to regain some losses over the day

The US dollar inched higher against its rivals as benchmark US 10-year Treasury debt yields rebounded from 15-month lows.  Base metals ended mostly higher. LME aluminium rose 0.9% and SHFE aluminium, edged down.

LME aluminium dropped to a low of $1,874.5/mt after miner Rio Tinto said they restarted bauxite mining in Australia after the cyclone was over. The aluminium contract then regained some losses overnight and closed at US$1,904.5 per tonne, facing pressure from the five-day moving average. The contract is likely to trade at US$1,850-1,930 per tonne today.

As on March 26, LME aluminium cash (bid) price stood at US$ 1849 per tonne, LME official settlement price stands at US$ 1849.50 per tonne; 3-months bid price stands at US$ 1875.50 per tonne, 3-months offer price is US$ 1876 per tonne; Dec 20 bid price stands at US$ 2008 per tonne, and Dec 19 offer price stands at US$ 2013 per tonne. 

The LME aluminium opening stock dropped to 1149725 tonnes. Live Warrants totalled at 727700 tonnes, and Cancelled Warrants were 422025 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1888 per tonne.

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange increased from US$ 2029 per tonne on March 26 to US$ 2032 per tonne today.

The most liquid SHFE may contract traded rangebound to end 0.29% lower at RMB 13,630 per tonne yesterday. The SHFE 1905 contract then unsuccessfully tested pressure from RMB 13,645 per tonne after longs lifted it above the five- and 10-day moving averages. It is likely to trade at RMB13,500-13,800 per tonne today and spot premiums are seen at RMB 290-320 per tonne.  

Lower prices of raw materials and earlier gains in prices of aluminium futures pushed average profits on domestic primary aluminium production into positive territory. This weighed on SHFE aluminium prices.