LME aluminium drops to find next support at US$1,862.50/t, supply hits highest since May 8

The downtrend in LME aluminium is continuing. The light metal breached last week’s low of US$1,887 per tonne to close at US$1,877 per tonne after night trading on Tuesday, June 13. A broker at Marex Spectron said that the next support level for LME aluminium was at US$1,862.50 per tonne.

"Marex data analysis shows yesterday's supply was the heaviest since the May 8 which was on that move down to that low," he said. It is likely that aluminium prices on LME will drop further in the near term.

As on June 13, LME official cash buyer aluminium price stands at US$1,876 per tonne, cash seller & settlement aluminium price is US$1,877 per tonne, 3M buyer price is US$1,883 per tonne, 3M seller price is US$1,883.50 per tonne, Dec1 buyer price is US$1,915 per tonne, and Dec1 seller price is US$1,920 per tonne. The current LME official Opening Stock of aluminium is estimated at 1444550 tonnes, total Live Warrants is 1031600 tonnes, and Cancelled Warrant is 412950 tonnes.

LME aluminium premiums, as on June 12, show slight decline in the US region. While LME Aluminium East-Asia Premium stands at US$110, LME Aluminium South-East Asia Premium remains unchanged at US$15, and LME Aluminium West-Europe Premium is static at US$85, LME Aluminium US Premium has dropped to US$195 (per tonne).

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The benchmark aluminium price at Shanghai Metal Exchange (SME) stands at US$1,997 per tonne on Wednesday, June 14, down from US$1,998 per tonne on Tuesday, June 13. 

At Shanghai Futures Exchange (SHFE), the most active aluminium future contract SHFE 1708 aluminium made many failed attempts to break through the 10-day moving average challenge, after opening at RMB 13,725 per tonne. The contract is predicted to find support from the rally in LME aluminium. However, poor market fundamentals will hinder the price rise in SHFE 1708 aluminium. SMM forecasts that SHFE 1708 aluminium should move lowly in the range of RMB 13,600-13,770 per tonne on Wednesday, June 14.

Spot aluminium in east China market is expected to trade at discounts of RMB 20-60 per tonne over SHFE 1706 aluminium contract on Wednesday, June 14, SMM said.

China Aluminum International Trading Co. (Chalco Trading) cut aluminium prices it offered in major markets today. The revised prices are as follows:

Unit: yuan/tonne 

The market focus will be on China urban fixed asset investment for January-May, retail sales and industrial value-added, US May CPI and retail sales, and US crude oil stocks on Wednesday, June 14, SMM said.