China aluminium update: Prices to stay volatile as trading inventories grow

Base metal prices on the SHFE are expected to be volatile on Tuesday, Shanghai Metals Market foresees. LME aluminium will fluctuate between USD 1,650-1,670/mt today. SHFE 1611 aluminium will move between RMB 12,400-12,600/mt as trading inventories grew, with spot premiums between RMB 430-470/mt.

“Base metal prices overnight rose after falling at first due to a weak dollar and rising oil price, and on Tuesday, uncertainties coming from China’s data results and US’s first presidential debate will add to price volatility,” SMM says.  



Key macroeconomic indicators for base metal prices

A series of major economic indicators are due for release today from China and the US. The US dollar index weakened overnight, while crude oil rose. Base metals fell at first and then climbed, mostly closing with gains. Base metals are expected to report big volatility today.

Value-added at China’s large industrials accelerated on a year-on-year basis. And prices of some energy and raw material climbed, boding well for profit at China’s large industrials in August. Stabilizing fixed asset investment and improving property market in August will also lend a boost.

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China aluminium stocks return to declines on transport disruptions

Aluminium stocks in China’s five major markets stopped growing and began falling sharply instead as new policy disrupted shipments, SMM learned.

Crackdowns on vehicle overloading on highways have tightened railway transport, affecting arrivals into major consumption hubs in south and east parts of the country, SMM explained.

Shipments from Xinjiang are unlikely to pick up anytime soon, SMM expects.

The table below shows details of aluminium stocks at China’s five major markets:

Unit: 1,000 tonne


On last Friday’s night trading, SHFE 1611 aluminium climbed to RMB 12,510/mt after opening at RMB 12,495/mt, ending at RMB 12,465/mt.