LME aluminium closed lower yesterday after a temporary gain; SHFE to test support at RMB 13,500 per tonne

The US dollar slipped from two-week highs as the boost from easing trade tensions between the US and China faded and ended 0.07% lower at 96.765. Base metals ended mostly lower. LME aluminium dropped 0.67% and SHFE aluminium dipped 0.4%.

As base metals mostly weakened overnight, three-month LME aluminium traded below the five- and 10-day moving averages, and finished 0.67% lower on the day at RMB1,779.5 per tonne overnight. The cash contract also dropped after showing a bullish trend. The contract is likely to trade at US$1,760-1,800 per tonne. 

As on July 2, Tuesday, LME aluminium cash (bid) price stood at US$ 1754.50 per tonne, LME official settlement price stands at US$ 1755.50 per tonne; 3-months bid price stands at US$ 1779.50 per tonne, 3-months offer price is US$ 1780 per tonne; Dec 20 bid price stands at US$ 1890 per tonne, and Dec 20 offer price stands at US$ 1895 per tonne.

The LME aluminium opening stock dropped further to 984450 tonnes. Live Warrants totalled at 636500 tonnes, and Cancelled Warrants were 347950 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1794 per tonne.

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange (SME) dropped further to US$ 1983 per tonne today from US$ 1991 per tonne on Tuesday.

The most liquid SHFE August contract climbed during the day, recovering from overnight losses to end the trading day 0.51% lower at RMB 13,710 per tonne yesterday. The August contract then stemmed its decline at a low of RMB 13,625 per tonne, and ended at that level, down 0.4% on the day. As the KDJ indicators continued to expand downwards, the contract may trade between RMB 13,600-13,700 per tonne today. Falling inventories are expected to continue to support prices and the contract is expected to test support at RMB 13,500 per tonne in the short term.