Both LME and SHFE traded downward last week on higher greenback and slow consumption; trend likely to continue next week

The US dollar recovered some ground on Monday May 27 and continued to hover at a higher range over the week amidst US-China trade tension. LME aluminium registered a declining trend throughout the week.  After a holiday on Monday May 27, the LME aluminium cash contract started the week with US$ 1773 per tonne and moved steadily downwards to wind up the week at US$1761 per tonne. Three-month LME aluminium fluctuated between US$1,799-1,814.5 per tonne on Tuesday and closed 0.08% higher at US$1,803.5 per tonne. Weak trading was seen for LME three months contract.

As on May 31, Thursday, LME aluminium cash (bid) price stood at US$ 1760.50 per tonne, LME official settlement price stands at US$ 1761 per tonne; 3-months bid price stands at US$ 1787.50 per tonne, 3-months offer price is US$ 1788.50 per tonne; Dec 20 bid price stands at US$ 1903 per tonne, and Dec 20 offer price stands at US$ 1908 per tonne.

The LME aluminium opening stock stood at 1155025 tonnes. Live Warrants totalled at 717625 tonnes, and Cancelled Warrants were 437400 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1784.05 per tonne.

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange (SME) showed the same trend starting the week with US$ 2072 per tonne and plunging down to US$ 2046 per tonne on Friday.  

The most-traded SHFE July contract rose for the third consecutive trading day on Monday, May 27 as longs entered after news that Shenhuo Group’s primary aluminium plant in Henan province will suspend its full capacity of 250,000 tonnes after a fire on Sunday evening. However, weaker consumption in some sectors and falling inventories offer downward and upward resistance keeping the contract within a tight range.

Both LME and SHFE contracts are not likely to show significant upward and downward movement in the coming week.