LME aluminium continued its downtrend while SHFE remains flat; likely to trade higher today

The US dollar weakened against the pound, which was buoyed by hopes that a Brexit deal could be reached in six to eight weeks. Base metals closed mixed. LME aluminium grew 0.68% overnight after closing at US$ 2000 per tonne yesterday.

The contract broke resistance at all moving averages and soared to a high of US$2,109 per tonne, on market talk that Rusal is likely to cut production this month. A downbeat macroeconomic sentiment closed LME aluminium around the 20-day moving average, at US$2,077 per tonne. LME aluminium is expected to trade at $2,080-2,110/mt.

As on September 10, LME aluminium cash (bid) price stands at US$ 1998 per tonne, LME official settlement price stands at US$ 2000 per tonne; 3-months bid price stands at US$ 2036 per tonne, 3-months offer price is US$ 2036.50 per tonne; Dec 19 bid price stands at US$ 2075 per tonne, and Dec 19 offer price stands at US$ 2080 per tonne. 

The LME aluminium opening stock dropped to 1059825 tonnes. Live Warrants totalled at 765025 tonnes, and Cancelled Warrants were 294800 tonne.

LME aluminium 3-months Asian Reference Price is hovering at US$ 2048 per tonne.

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange registered a slight change to stand at US$ 2131 today from US$ 2129 per tonne on September10. 

The SHFE 1811 contract traded below the five- and 10-day moving averages, and broke support at RMB 14,625 per tonne. The contract then increased at a slower rate on market talk that China may ease production curbs in the upcoming heating season. However, potential cutbacks at Rusal will continue to bolster prices in the short run. The contract is seen trading at RMB 14,750-14,850 per tonne today Spot offers are set at a discount of RMB 30 per tonne to a premium of RMB 10 per tonne. 

US President Donald Trump's threat of new tariffs on Chinese goods cast a cloud over the market. The contract is expected to trade weakly.