LME Aluminium gets support from oil output cut agreement, SHFE Aluminium drops further

LME Aluminium price fall finally took a hiatus with the OPEC members reaching consensus on oil output cut on Thursday. The contract which traded at around US$1,722/mt on Tuesday, closed at US$1,722.50/mt on Wednesday. On Thursday, December 1, LME aluminium price will move in the range of US$1,725-1,745/mt, foresees Shanghai Metals Market.

LME official opening stocks of aluminium, as on November 30, stands at 2155050mt, total Live Warrants is estimated at 1388225mt and Cancelled Warrant is recorded at 760925mt.


In China, aluminium traded on Shanghai Metal Exchange opened with losses. The contract after closing at US$2,029/mt on Wednesday, opened at US$2,022/mt on Thursday, December 1.  

On Wednesday, aluminium traded on Shanghai Futures Exchange- SHFE 1702 aluminium started at RMB 13,335/mt and then increased slightly with entering of longs, up to as high as RMB 13,390/mt. Later, SHFE 1702 aluminium dropped with positions closing by longs and plumped below the 40-day moving average. SHFE 1702 aluminium will rise slightly to RMB 13,250-13,500/mt on Thursday, SMM foresees.

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Base metals including aluminium are expected to get a support from OPEC’s oil agreement on Thursday. “After the oil cut agreement, today will see PMI results from many countries, and Shanghai market will continue digesting OPEC’s cut agreement,” says SMM.

Spot premiums in China's domestic market should trade at premiums of RMB 150-190/mt on Thursday.