Both LME and SHFE aluminium edged down on Monday with on a strong greenback; likely to trade lower today

The US dollar increased against a basket of major currencies on traders' bets that China and the US are moving closer to a trade deal. The greenback gained for a fourth consecutive trading day. Base metals declined across the board as LME aluminium led the drops and fell 2.02%. SHFE aluminium also edged down. 

LME aluminium started the week with a drop. News around China’s further tax cuts depressed upward momentum in LME aluminium, which dipped to the lowest since February 20, at US$1,861 per tonne, after it initially fell below the US$1,900 per tonne level during the European trading session yesterday. We expect LME aluminium to trade at US$1,840-1,910 per tonne today.

As on March 4, LME aluminium cash (bid) price stood at US$ 1859per tonne, LME official settlement price stands at US$ 1859.50 per tonne; 3-months bid price stands at US$ 1878 per tonne, 3-months offer price is US$ 1878.50 per tonne; Dec 20 bid price stands at US$ 2008 per tonne, and Dec 20 offer price stands at US$  2013 per tonne.  

The LME aluminium opening stock decreased to 1230225 tonnes. Live Warrants totalled at 662650 tonnes, and Cancelled Warrants were 567575 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1913 per tonne.

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange dropped to US$ 2021per tonne today from US$ 2048 per tonne on March 1. 

The most liquid SHFE May aluminium contract climbed to the day-high of RMB 13,750 per tonne in afternoon trade yesterday as social inventories of primary aluminium ingots in China slowed growth and as spot trades occurred briskly. The contract advanced 0.62% to close the day at RMB 13,735 per tonne.  Last night, the contract registered the biggest drop since February 11, as it closed 1.42% lower at RMB 13,540 per tonne. The SHFE 1905 contract is expected to trade at RMB 13,350-13,700 per tonne.