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26 JULY 2018 AL CIRCLE

LME aluminium continues to be under pressure on worries over a trade war; SHFE stays flat

EDITED BY : BEETHIKA BISWAS 2MINS READ

The US dollar dipped to around 94, and closed at 94.19. Base metals were under pressure from ongoing worries over a trade war even though the EU and US declared a ceasefire. LME aluminium fell 0.7% from Tuesday to close at US$ 2056.50 per tonne. The contract jumped after opening overnight, to a high of US$2,087.5 per tonne as the greenback weakened and closed at $2,064 per tonne in the morning. Inventory across LME warehouses fell 2,900 tonnes to 1,209,225 tonnes after several days of increase. Shanghai Metals Market expects  LME aluminium to trade at US$2,066-2,086 per tonne.

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As on July 25, LME aluminium cash (bid) price stands at US$ 2056 per tonne, LME official settlement price stands at US$ 2056.50 per tonne; 3-months bid price stands at US$ 2073 per tonne, 3-months offer price is US$ 2074 per tonne; Dec 19 bid price stands at US$ 2125 per tonne, and Dec 19 offer price stands at US$ 2130 per tonne.

The LME aluminium opening stock increased to 1209225 tonnes. Live Warrants totalled at 939975 tonnes, and Cancelled Warrants were 269250 tonne.

LME aluminium 3-months Asian Reference Price is hovering at US$ 2077.43 per tonne.

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange went up slightly to US$ 2090 per tonne on July 26, from US$ 2089 per tonne on July 25.

The SHFE 1809 contract edged up from the previous day and tested the 40-day moving average with support at the 10-day moving average on Wednesday. The SHFE contract also declined today as investors covered their longs. As market sentiment improved, SMM expects the contract to trade at RMB 14,200-14,400 per tonne today. Spot discounts are set at RMB 110-70 per tonne. 

SMM expects the contract to manage to stand firmly above the 40-day moving average tonight with support from longs.

Key things to watch today will be the European central bank's rate decision for July, the US durable goods orders and wholesale inventories last month, as well as its weekly jobless claims. 


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EDITED BY : BEETHIKA BISWAS 2MINS READ

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