Both LME and SHFE aluminium regained some losses yesterday on falling dollar; to trade rangebound today

The US dollar continued to decline against a basket of major currencies as investors remained cautious about the greenback in face of potential interest rate cuts. The dollar index dipped to the lowest since March 21 and closed at 95.985. LME base metals increased across the board. LME aluminium rose 1.8% and SHFE aluminium expanded 0.7%.

Three-month LME aluminium shrugged off pressure from the US$1,800 per tonne level as most base metals rose on a lower US dollar overnight. LME aluminium expanded 1.81% to finish at US$1,800 per tonne overnight. The contract is likely to trade at US$1,780-1,830 per tonne today.

As on June 24, Monday, LME aluminium cash (bid) price stood at US$ 1746.50 per tonne, LME official settlement price stands at US$ 1747.50 per tonne; 3-months bid price stands at US$ 1772.50 per tonne, 3-months offer price is US$ 1773 per tonne; Dec 20 bid price stands at US$ 1888 per tonne, and Dec 20 offer price stands at US$ 1893 per tonne.

The LME aluminium opening stock dropped to 1016025 tonnes. Live Warrants totalled at 645725 tonnes, and Cancelled Warrants were 370300 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1768 per tonne.

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange (SME) increased to US$ 2019 per tonne today from US$ 2004 per tonne on Monday.

The most traded SHFE August contract climbed during the day, recovering from Friday night losses to close the trading day slightly lower at RMB 13,830 per tonne yesterday. The SHFE August contract received support from longs and closed higher last night at RMB 13,890 per tonne. Despite falling inventories, SHFE aluminium is unlikely to strongly break the RMB 14,000 per tonne level in the short term, in the absence of positive news on the consumption or cost front. It is expected to trade at RMB 13,800-14,100 per tonne, with spot premiums up to RMB 20 per tonne today.