LME aluminium edges higher, but any extension further will be capped at US$1,885/t

LME aluminium is showing mild uptrend. The light metal upon failing to break a support zone of US$1,862.50-US$1,871 per tonne, closed at US$1,872 per tonne on Thursday, June 22, marginally up by 0.34 per cent from its previous close of US$1,865.50 per tonne.

Reuters’ technical analysis suggests that LME aluminium may again test a support at US$1,862.50 per tonne.  If it succeeds to hold ground at the current level, the rebound will be extended to US$1,885 per tonne. According to Shanghai Metals Market forecast, aluminium prices on the global bourse will range at US$1,860-US$1,880 per tonne on Friday, June 23.

As on June 22, LME official cash buyer aluminium price stands at US$1,871.50 per tonne, cash seller & settlement aluminium price is US$1,872 per tonne, 3M buyer price is US$1,877 per tonne, 3M seller price is US$1,877.50 per tonne, Dec1 buyer price is US$1,910 per tonne, and Dec1 seller price is US$1,915 per tonne. The current LME official Opening Stock of aluminium is estimated at 1432750 tonnes, total Live Warrants is 1067050 tonnes, and Cancelled Warrant is 365700 tonnes.

LME aluminium premiums, as on June 21, remain unchanged across major regions. 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 at US$85, and LME Aluminium US Premium is at US$195 (per tonne).

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The benchmark aluminium price at Shanghai Metal Exchange (SME) stands at US$1,996 per tonne on Friday, June 23, down 0.74 per cent from the benchmark price of US$2,011 per tonne on June 22.

At Shanghai Futures Exchange (SHFE), the most active aluminium future contract SHFE 1708 aluminium opened at RMB 13,910 per tonne on Thursday, June 22 and then dropped to RMB 13,765 per tonne. SMM predicts that SHFE 1708 aluminium will move at RMB 13,700-13,900 per tonne on Friday, June 23.  

Spot aluminium in east China market is expected to trade at discounts of RMB 130-90 per tonne over SHFE 1707 aluminium contract on Friday.

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

Unit: RMB per tonne

The market focus will be on final reading of France’s GDP in Q1 2017, fresh reading of Markit manufacturing PMIs from France, Germany, Eurozone and US in June and US’s new home sales in May on Friday, SMM said.