LME aluminium edges up supported by a falling dollar index; range-bound trading expected

LME aluminium prices have gained further as the US dollar index fell after the Federal Reserve announced on March 15 that it raised its benchmark interest rate. The contract closed at US$1,895 per tonne after Thursday's night trading, up 1.71 per cent from its previous day's close of US$1,863 per tonne. However, the downside momentum in the US dollar index seems to have subsided as it neared a strong support. This could indicate at a near-term fluctuating phase for LME aluminium. As shanghai Metals Market finds it, the contract is likely to fluctuate in the range of US$1,880-1,916 per tonne on Friday, March 17, still higher than its current trading brand.

As on March 15, LME official cash buyer price of aluminium stands at US$1,894.50 per tonne, cash seller & settlement price is US$1,895 per tonne, 3M buyer price is US$1,905.50 per tonne, 3M seller price is US$1,906 per tonne, Dec1 buyer price is US$1,940 per tonne, and Dec1 seller price is US$1,945 per tonne. The current LME official Opening Stock of aluminium is estimated at 2007850 tonnes, total Live Warrants is 1281525 tonnes, and Cancelled Warrant is 726325 tonnes.

As on March 15, LME Aluminium US Premium stands at US$215, LME Aluminium West-Europe Premium remains unchanged 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 price of aluminium on Shanghai Metal Exchange (SME) has diverged from the LME aluminium price trend. The benchmark aluminium price on Friday, March 17, stands at US$1,969 per tonne, marginally down by 0.05 per cent from US$1,970 per tonne on Thursday.

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Aluminium traded on the Shanghai Futures Exchange (SHFE) tracked the uptrend in LME aluminium. SHFE 1705 aluminium opened at RMB 13,810 per tonne and then advanced to close at RMB 13,960 per tonne on Thursday. SMM says the average aluminium price on the bourse will range at RMB 13,750-13,980 per tonne on Friday. 

Spot aluminium in China's domestic market will trade at discounts of RMB 220-180 per tonne on Friday, says SMM.

A series of key economic data including US February industrial output, manufacturing output, March University of Michigan’s CCI and LMCI in February will be released today. Base metals are expected to remain range-bound yet at a higher trading band supported by a weak dollar index.