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19 SEPTEMBER 2018 AL CIRCLE

Fresh tariffs by the US on China lifted LME again yesterday; SHFE likely to trade upward

EDITED BY : BEETHIKA BISWAS 2MINS READ

The US dollar index rebounded as it recovered from earlier weakness that came after China responded with new tariffs on $60 billion worth of US goods. Meanwhile, US Treasury yields were also on the rise, to their highest since May for the 10-year bond. Base metals increased for the most part. Market worries over trade conflict between China and the US eased after official decisions on tariffs were made Tuesday. Prices of aluminium are expected to have little downward room with the trade war now getting offcial. China's Ministry of Commerce (MOC) on Tuesday September 18 confirmed US' decision to impose an additional 10% tariff on $200 billion worth of Chinese imports and expressed its plan to take countermeasures to safeguard the country.

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LME aluminium closed the day’s trading at US$ 2012 per tonne and rose to a high of US$2,056.5 per tonne overnight, finally closing at US$2,029 per tonne. Shanghai Metals Market forecasts it to trade at US$2,020-2,050 per tonne today. As on September 18, LME aluminium cash (bid) price stands at US$ 2011 per tonne, LME official settlement price stands at US$ 2012 per tonne; 3-months bid price stands at US$ 2040 per tonne, 3-months offer price is US$ 2041 per tonne; Dec 19 bid price stands at US$ 2082 per tonne, and Dec 19 offer price stands at US$ 2087 per tonne. 

The LME aluminium opening stock dropped to 1035275 tonnes. Live Warrants totalled at 723350 tonnes, and Cancelled Warrants were 311925 tonne.

LME aluminium 3-months Asian Reference Price is hovering at US$ 2029 per tonne.

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange increases slightly to US$ 2112 per tonne today from US$ 2102 per tonne on September18. 

The SHFE 1811 contract extended overnight losses to an intraday low of RMB 14,400 per tonne before it regained some losses to close at RMB 14,485 per tonne yesterday. The contract, according to SMM is expected to trade at RMB 14,430-14,530 per tonne. Spot offers are seen at a discount of RMB 20 per tonne to a premium of RMB 20 per tonne.  

Market sentiment took a hit from fresh tariffs by the US. We expect the contract to upwardly test the five-day moving average tonight.


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EDITED BY : BEETHIKA BISWAS 2MINS READ

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