LME aluminium gets a boost from a weak US dollar as Fed hikes interest rates

Aluminium prices on the London Metal Exchange (LME) got a boost from the falling US dollar after Federal Reserve announced interest rate hike at the conclusion of this month’s FOMC meeting on Wednesday, March 15. LME aluminium closed at US$1,863 per tonne after Wednesday's night trading, rising 0.64 per cent from Tuesday's close of US$1,851 per tonne. As per Shanghai Metals Market (SMM) forecast, the contract will trade higher at US$1,876-1,900 per tonne on Thursday, March 16.

As on March 15, LME official cash buyer price of aluminium stands at US$1,862 per tonne, cash seller & settlement price is US$1,863 per tonne, 3M buyer price is US$1,875 per tonne, 3M seller price is US$1,875.50 per tonne, Dec1 buyer price is US$1,912 per tonne, and Dec1 seller price is US$1,917 per tonne. The current LME official Opening Stock of aluminium is estimated at 2019325 tonnes, total Live Warrants is 1292800 tonnes, and Cancelled Warrant is 726525 tonnes.

As on March 14, 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 slide in US dollar index also saw the benchmark price of aluminium on Shanghai Metal Exchange (SME) jump higher at US$1,970 per tonne on Thursday, March 16, from the previous day's price of US$1,945 per tonne.

The 3-month aluminium future contract traded on Shanghai Futures Exchange (SHFE) opened at RMB 13,705 per tonne on Wednesday and then dropped to RMB 13,630 per tonne. During the afternoon trading hours, SHFE 3-month aluminium climbed higher at RMB 13,760 per tonne before closing at RMB 13,750 per tonne.

SMM thinks base metals market in China will "continue digesting US’s rate hike decision," and overall aluminium will hover in the range of US$13,700-13,900 per tonne on Thursday.

{googleAdsense}

Spot aluminium in China's domestic market will trade at discounts of RMB 170-130 per tonne on Thursday, says SMM.

The Societe Generale of China released its price forecast for base metals in 2017 on Wednesday. According to the forecast, spot aluminium prices in China major markets will average US$1,800 per tonne in 2017, up from US$1,725 per tonne as previously expected.