Declining inventory pulled up LME aluminium overnight after the day's fall; positive fundamentals support SHFE

The US dollar declined from a two-year high as weaker domestic data and the threat of economic fallout from the trade war with China grew expectations for an interest-rate cut this year. Base metals ended mixed as LME aluminium jumped 0.84 and SHFE aluminium expanded 0.39%.

Three months aluminium closed the day’s trading lower at US$ 1770.50 per tonne. A decline of 8,600 tonnes in stocks across LME-approved warehouses bolstered LME aluminium, to a high of US$1,798 per tonne overnight. It ended 0.84% higher on the day at US$1,796 per tonne.

As on May 21, LME aluminium cash (bid) price stood at US$ 1739 per tonne, LME official settlement price stands at US$ 1740 per tonne; 3-months bid price stands at US$ 1769.50 per tonne, 3-months offer price is US$ 1770.50 per tonne; Dec 20 bid price stands at US$ 1890 per tonne, and Dec 20 offer price stands at US$ 1895 per tonne.  

The LME aluminium opening stock stood at 1214025 tonnes. Live Warrants totalled at 752100 tonnes, and Cancelled Warrants were 461925 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1782 per tonne.

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange increased to US$ 2051 per tonne today from US$ 2040 per tonne yesterday.  

Short-covering bolstered the most active SHFE July contract to RMB14,160 per tonne yesterday, before longs profit-taking drove it to give up those gains to end the trading day 0.46% lower at RMB14,110 per tonne. The contract has fallen but remained above the 40-day moving average. Fundamentals continued to support the SHFE 1907 contract, which climbed 0.39% to finish at RMB 14,165 per tonne. It is seen trading at RMB 14,150-14,250 per tonne today.