LME aluminium came off from a high overnight on dollar's gain; SHFE aluminium fell on weak fundamentals

The US dollar recovered earlier losses afternoon as Brexit negotiations were once again thrown into disarray. The dollar index, which tracks the greenback against a basket of other currencies, rose from a nearly three-month low, ending 0.13% higher at 97.33. LME base metals closed mixed while SHFE complex mostly dropped. LME aluminium slipped 0.69% and SHFE aluminium fell 0.4%.

After a temporary gain on weak dollar over the day, LME aluminium went back to its downward curve overnight. Three-month LME aluminium relinquished earlier gains and came off from a high of US$1,741 per tonne to below all moving averages, closing at US1,724 per tonne. LME aluminium is likely to trade at US$1,710-1,750 per tonne today. 

As on October 21, Monday, LME aluminium cash (bid) price stood at US$ 1735 per tonne, LME official settlement price stands at US$ 1735.50 per tonne; 3-months bid price stands at US$ 1741 per tonne, 3-months offer price is US$ 1742 per tonne; Dec 20 bid price stands at US$ 1823 per tonne, and Dec 20 offer price stands at US$ 1828 per tonne.

The LME aluminium opening stock dropped to 974625 tonnes. Live Warrants totalled at 802300 tonnes, and Cancelled Warrants were 172325 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1730 per tonne.

SHFE Aluminium Price Trend

Benchmark aluminium price for SHFE (Shanghai Future Exchange) has dropped to USD 1997 per tonne today, 22 October 2019.

The most-traded SHFE December contract gave up most of the gains during the previous three sessions as loaded-up shorts weighed the contract below all moving averages right after it opened at RMB 13,880 per tonne yesterday. It closed the trading day 0.72% lower at RMB 13,760 per tonne. Trends in the December contract also weakened, as it fell below the five- and 10- day moving averages and failed to regain losses during the previous session, ending at RMB 13,770 per tonne. It is expected to trade at RMB 13,700-13,820 per tonne.

While weak fundamentals are set to keep aluminium prices under pressure in the fourth quarter, the pullback indicated wavering confidence in the market.