Further downside in LME aluminium is likely, Shanghai aluminium inches up

LME aluminium is swinging in a tight range. The lightmetal which has been showing sideways movement of late closed unchanged at US$1,907 per tonne on Wednesday, April 12. Reuters' analysis says LME aluminium may edge up to US$1,930 per tonne, as it has pierced a resistance at $1,914. However, the bearish divergence on the daily Relative Strength Index (RSI) suggests that the contract could head further south-ward.

As per Shanghai Metals Market (SMM) forecast, LME aluminium is likely to move at US$1,891-1,922/mt on Thursday, April 13. The volatility in LME aluminium price is in normal inverse correlation with the US dollar index showing steady uptrend since last week Monday.

As on April 12, LME official cash buyer price of aluminium stands at US$1,906.50 per tonne, cash seller & settlement price is US$1,907 per tonne, 3M buyer price is US$1,915.50 per tonne, 3M seller price is US$1,916.50 per tonne, Dec1 buyer price is US$1,957 per tonne, and Dec1 seller price is US$1962 per tonne. The current LME official Opening Stock of aluminium is estimated at 1774950 tonnes, total Live Warrants is 1099250 tonnes, and Cancelled Warrant is 675700 tonnes.

LME aluminium premiums remain unchanged across major global markets. As on April 11, LME Aluminium US Premium stands at US$215, LME Aluminium West-Europe Premium stands at US$95, LME Aluminium East-Asia Premium is US$105 and LME Aluminium South-East Asia Premium is US$15 (per tonne).

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The benchmark aluminium price on Shanghai Metal Exchange (SME) has moved marginally higher from its previous stand. It is US$1,999 per tonne on April 13, up 0.05 per cent from Wednesday's benchmark prie of US$1,998 per tonne.

Aluminium futures contract traded on Shanghai Futures Exchange (SHFE) registered marginal drop on Wednesday. SHFE 1706 aluminium started at RMB 14,045 per tonne and then fluctuated before closing at RMB 13,970 per tonne. SHFE 1706 aluminium is expected to move at RMB 13,850-14,100 per tonne on Thursday, SMM says.

Spot aluminium in China's domestic market is projected to trade at discounts of RMB 110-70 per tonne on Thursday.

The data calendar of Thursday, April 13, features the release of China March trade data, inflation in Germany, France and US, the number of US initial jobless claims last week, and University of Michigan’s CCI in April.