LME aluminium drops, may test a support at US$1,948/t

LME aluminium ended last week in a drop from its weekly high of US$1,981 per tonne on Thursday, March 30, to US$1,946 per tonne on Friday, March 31. The contract declined 0.46 per cent from Thursday's closing at US$1,955 per tonne. The price movement of the light metal on LME was in tandem with the US dollar index that slowed down towards the end of the week after a consecutive four-day bull run. This divergence is likely to continue in the short term.

Reuters analysis suggests, LME aluminium may test a support at US$1,948 per tonne and retrace towards US$1,913 per tonne over the next few days. A break below US$1,948 could cause a further loss to US$1,934, while a break above US$1,970 could lead to a gain to US$1,984.

The fall in LME aluminium prices can also be explained by the drop in crude oil prices as the U.S. has raised its drilling activity and Iraq said it could boost production by the year end.

As on March 31, LME official cash buyer price of aluminium stands at US$1,946 per tonne, cash seller & settlement price is US$1,946.50 per tonne, 3M buyer price is US$1,954 per tonne, 3M seller price is US$1,954.50 per tonne, Dec1 buyer price is US$1,987 per tonne, and Dec1 seller price is US$1,992 per tonne. The current LME official Opening Stock of aluminium is estimated at 1886400 tonnes, total Live Warrants is 1003275 tonnes, and Cancelled Warrant is 883125 tonnes.

{googleAdsense}

There has been no change in the LME aluminium premium last week. As on March 31, LME Aluminium US Premium remains unchanged at US$215, LME Aluminium West-Europe Premium stands at US$95, LME Aluminium East-Asia Premium is US$100 and LME Aluminium South-East Asia Premium is US$15 (per tonne).

The benchmark aluminium price on Shanghai Metal Exchange inched higher from US$1,966 per tonne on Thursday, March 30, to stand at US$1967.70 per tonne on Friday, March 31.