
LME aluminium dipped during morning trading on Wednesday, November 2 as profit-taking weighed on the prices marking a hiatus after the recent rally. The US dollar index kept easing on Wednesday as uncertainty persisted over the US presidential elections next week. The investors are feeling jittery and increasingly moving towards safe-haven assets.
The three-month LME aluminium price was down by $26 from $1,732 per tonne to stand at $1,709 per tonne. LME official opening stocks, which were at 2,141,300 tonnes, fell 3,950 tonnes to 2,137,350 tonnes. Cancelled warrants, however, jumped 764775 tonnes, a move especially centred on Asia.
According to Shanghai Metals Market forecast, LME aluminium is expected to move between $1,710-1,730 per tonne on Thursday, November 3. .jpg)
In China, SHFE aluminium, which gained nearly 15 per cent during past seven-day's trading, took a dramatic downturn on November 2, with SHFE aluminium 1611, 1612 and 1701 contracts all hitting daily downside limits.
Aluminium prices on Shanghai Metals Exchange closed at $2,153 per tonne after Wednesday’s night trading, and opened at $2,109 on Thursday. SMM attributes the dip to a number of factors.
SHFE 1612 aluminium is expected to move above the 10-day moving average and fluctuate at RMB 13,200-13,350 per tonne, predicted SMM. Market players are likely to wait and see before making a transaction decision as uncertainty continues to persist over domestic aluminium inventories.
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In China’s spot market, aluminium should trade at premiums of RMB 280-320 per tonne over SHFE 1611 aluminium on Thursday, observed SMM.
SMM predicts no significant downside room for aluminium prices. The latest price declines will attract downstream manufacturers to replenish their raw material stocks. Maximum transport capacity remains tight and deliverable aluminium ingots are still limited. Rising raw material cost, mainly alumina and coal prices have added to overall aluminium smelting costs. All these factors will give buoy aluminium prices.
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