LME aluminium gathers strength from a weak dollar, analysts show cautious optimism

LME aluminium is inching higher through at a ‘cautiously moderate’ pace. The light metal traded globally closed at US$1,928 per tonne on Wednesday, May 17, up 0.67 per cent from its previous close of US$1,915 per tonne on Tuesday, May 16. LME aluminium gathered support partly from the US Dollar Index that has been extending its losing streak to four consecutive seasons now. The greenback remains under pressure in today’s session (May 18).

Shanghai Metals Market (SMM) analyses that LME aluminium will meet strong resistance at US$1,930 per tonne and move at US$1,917-1,935 per tonne on Thursday, May 18.

As on May 17, LME official cash buyer price of aluminium stands at US$1,927 per tonne, cash seller & settlement price is US$1,928 per tonne, 3M buyer price is US$1,925.50 per tonne, 3M seller price is US$1,926 per tonne, Dec1 buyer price is US$1,960 per tonne, and Dec1 seller price is US$1,965 per tonne. The current LME official Opening Stock of aluminium is estimated at 1526800 tonnes, total Live Warrants is 964850 tonnes, and Cancelled Warrant is 561950 tonnes.

LME aluminium premiums, as on May 16, remain unchanged across major regions. LME Aluminium East-Asia Premium stands at US$110, LME Aluminium US Premium is US$215, LME Aluminium West-Europe Premium is US$95, and LME Aluminium South-East Asia Premium remains unchanged at US$15 (per tonne).

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The benchmark aluminium price at Shanghai Metal Exchange (SME) has dropped slightly today, on May 18. It stands at US$2,003 per tonne on Thursday, May 18, down 0.54 per cent from US$2,014 per tonne on Wednesday, May 17.

At Shanghai Futures Exchange (SHFE), the most active aluminium future contract SHFE 1707 aluminium traded around RMB 14,025 per tonne on Wednesday, May 17. SMM predicts that the contract is likely to move in a tight range of RMB 13,980-14,120 per tonne on Thursday, May 18. It should meet resistance at the 20-day, 40-day and 60-day moving averages.

Spot aluminium in China market is expected to trade at discounts of RMB 140-100 per tonne over SHFE 1706 aluminium contract on Thursday, May 18, SMM said.

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

Unit: yuan/tonne 

The market focus will be on the number of US initial jobless claims last week, the Philadelphia Fed's manufacturing index in May and UK’s seasonally adjusted retail sales in April that are scheduled for release today.