
The dollar index rose past 95 on Thursday as trade tension between the US and China grew. China's offshore yuan extended its decline to 6.8798 yuan overnight. LME base metals closed mixed on Thursday. LME aluminium dipped on Thursday and closed at US$ 2023 per tonne. The contract is likely to trade at US$2,030-2,060 per tonne today.
{alcircleadd}As on August 2, LME aluminium cash (bid) price stands at US$ 2022 per tonne, LME official settlement price stands at US$ 2023 per tonne; 3-months bid price stands at US$ 2046 per tonne, 3-months offer price is US$ 2047per tonne; Dec 19 bid price stands at US$ 2098 per tonne, and Dec 19 offer price stands at US$ 2103 per tonne.
The LME aluminium opening stock dropped to 1192075 tonnes. Live Warrants totalled at 850500 tonnes, and Cancelled Warrants were 341575 tonne.
LME aluminium 3-months Asian Reference Price is hovering at US$ 2052 per tonne.
SME and SHFE Aluminium Price Trend
The benchmark aluminium price on Shanghai Metal Exchange dropped slightly to US$ 2080 per tonne on August 3, from US$ 2090 per tonne on August 2.
Rising shorts dragged the SHFE 1809 contract to the lowest level in two weeks, at RMB 14,245 per tonne yesterday. Cost and the daily moving average provided support and the contract rebounded to around RMB 14,330 per tonne and closed at RMB 14,320 per tonne. The contract opened lower after an initial gain and closed at RMB 14,415 per tonne overnight. Rebounding prices of prebaked anode and expected production cuts provided support for the upward correction, but pressure from US-China trade disputes continues to put pressure. We expect the SHFE 1809 contract to trade at RMB 14,350-14,450 per tonne with spot discounts at RMB 80-40 per tonne. Market participants should monitor the development of trade tariffs between China and the US.
Key factors to watch today will be China Caixin services purchasing managers’ index (PMI), Eurozone retail sales growth in June, US trade balance in June, nonfarm payrolls report and ISM services PMI in July.
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