
The US dollar held onto gains from the previous session as risk aversion eased on trade hopes and better economic data. The dollar index held above 98 and finished at 98.01. Base metals closed mixed. LME aluminium fell 0.42% and SHFE aluminium advanced 0.28%.
After the bank holiday on Monday at LME, the three-month LME aluminium gave up all the gains accumulated overnight on Friday and slid to a low of US$1,758.5 per tonne on Tuesday. The contract then ended down 0.42% on the day at US$1,760 per tonne overnight. With further downside room, it is expected to trade between US$1,740-1,760 per tonne today.
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As on August 27, Tuesday, LME aluminium cash (bid) price stood at US$ 1743 per tonne, LME official settlement price stands at US$ 1746 per tonne; 3-months bid price stands at US$ 1777 per tonne, 3-months offer price is US$ 1778 per tonne; Dec 20 bid price stands at US$ 1860 per tonne, and Dec 20 offer price stands at US$ 1865 per tonne.
The LME aluminium opening stock dropped to 929125 tonnes. Live Warrants totalled at 652300 tonnes, and Cancelled Warrants were 276825 tonnes.
LME aluminium 3-months Asian Reference Price is hovering at US$ 1763 per tonne.
SME and SHFE Aluminium Price Trend
The benchmark aluminium price on Shanghai Metal Exchange (SME) has increased to stand at US$ 1995 per tonne today from US$ 1986 per tonne on Tuesday.
As longs entered the market, the most traded SHFE 1910 contract breached the 10- and 20-day moving averages to an intraday high of RMB 14,290 per tonne, before it eased to close the day a tad higher at RMB 14,250 per tonne on Tuesday. The SHFE October contract traded robustly with fundamental support, rallying from a low of RMB 14,235 per tonne and closed 0.25% higher on the day at RMB 14,285 per tonne overnight. Expectations of demand recovery after the slow season may keep the contract between RMB 14,200-14,300 per tonne today.
The escalation of US-China trade tensions accounted for recent losses in SHFE aluminium, but fundamentals will keep it strong.
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