LME aluminium climbed 3.7% to a two months high driven by US sanctions on Rusal; SHFE follows the trend

LME aluminium climbed 3.7% to a record high in two months, driven by US sanctions and trade restrictions on Rusal. LME aluminium tested a high of $2,242 per tonne overnight as the US dollar weakened and as the US-Russia trade conflict took over the trade war issue. Reuters reported yesterday London Metal Exchange will suspend Rusal's aluminium from its list of approved brands from April 17. According to data by the exchanges on Monday April 9, Eastern Europe accounted for 36% of LME aluminium inventories, the majority of which is supplied by Russia. The metal contract finally closed at US$2,172 on Tuesday April 10.

According to Shanghai Metals Market analysis, LME aluminium is likely to trade rangebound at US$2,185-2,235 today. SMM sees further upward room for LME aluminium.

As on April 9, LME aluminium cash (bid) price stands at US$ 2171 per tonne, LME official settlement price stands at US$ 2172 per tonne; 3-months bid price stands at US$ 2173 per tonne, 3-months offer price is US$ 2175 per tonne; Dec 19 bid price stands at US$ 2195 per tonne, and Dec 19 offer price stands at US$ 2200 per tonne. 

The LME aluminium opening stock has dropped to 1249575 tonnes. Live Warrants totalled at 972000 tonnes, and Cancelled Warrants were 277575 tonne.

LME aluminium 3-months ABR price is hovering low at US$ 2155.08 per tonne. 

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange slightly increased from US$ 2254 per tonne on April 10 to US$ 2265 per tonne on April 11.

Driven by bullish LME aluminium, SHFE aluminium inched up overnight but with limited momentum to RMB 14,350 per tonne today. Driven by the rising cost of aluminium in China, SHFE aluminium has further room to rise in the short term but likely to face pressure in the mid-term due to limited orders from downstream producers in April and May.  SMM expects the most traded SHFE aluminium to hover at RMB 14,400-14,550 per tonne with spot discounts at RMB 110-70 per tonne today. 

Despite potential lower tariffs indicated by Chinese President Xi Jinping, the US dollar edged down 0.23 to 89.6 overnight while the euro gained. Base metals rose across the board. Key factors to watch today include China's inflation data for March, the US' consumer price index (CPI) and the US Energy Information Administration's (EIA) crude oil inventory data.