
The US dollar fell to a week-low on Tuesday as investors unwound long bets on the currency, anticipating that the Federal Reserve could slow the pace of US interest rate hikes after this week's policymaking meeting. LME base metals traded lower on Tuesday and aluminium lost 0.5%. SHFE base metals performed similarly overnight. Aluminium edged down 0.2%.
LME aluminium rebounded from US$ US$1,936 per tonne and closed at US$ 1940 per tonne on Tuesday. We see limited upside room for LME aluminium which is likely to trade at US$1,930-1,950 per tonne today.
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As on December 18, Tuesday, LME aluminium cash (bid) price stood at US$ 1939per tonne, LME official settlement price stands at US$ 1940 per tonne; 3-months bid price stands at US$ 1941 per tonne, 3-months offer price is US$ 1942 per tonne; Dec 19 bid price stands at US$ 1990 per tonne, and Dec 19 offer price stands at US$ 1995 per tonne.
The LME aluminium opening stock increased to 1227325 tonnes. Live Warrants totalled at 1017775 tonnes, and Cancelled Warrants were 209550 tonnes.
LME aluminium 3-months Asian Reference Price is hovering at US$ 1938 per tonne.
SME and SHFE Aluminium Price Trend
The benchmark aluminium price on Shanghai Metal Exchange dropped to US$ 1973 per tonne today from US$ 1979 per tonne on December 18.
Production cuts at smelters started to tighten supplies of aluminium ingots in the market. This, coupled with large-scale purchases by traders this week, buoyed confidence across longs in the SHFE 1902 contract. The contract rebounded from a low of RMB 13,700 per tonne, and rose along the five-day moving average to settle RMB 95 per tonne higher on the day at RMB 13,740 per tonne. The contract may manage to stand firm above the five-day moving average today.
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