LME aluminium headed further south, SHFE aluminium seeking support at US$1,988/t

<p>LME aluminium prices are in retreat due to the supply side reforms initiated in China. Though Goldman Sachs holds a better price outlook for the light metal in the coming months (US$2,100 in 12 months), the recent price drop seems to be taking the sheen off the light metal to a certain extent. LME aluminium, which ended at US$US$1,930 per tonne last week Friday, closed further down at US$1,909 per tonne on Tuesday, May 2.</p> <p>Reuters&rsquo; technical analysis suggests that LME aluminium may revisit its May 2 low of US$1,904 per tonne, following its failure to break a resistance at US$1,931. According to Shanghai Metals Market (SMM), LME aluminium should move between US$1,910-1,940 per tonne on Wednesday, May 3, with strong resistance at the 5-day, 10-day and 20-day moving averages while looking for support at the 60-day moving average.</p> <p><img style="vertical-align: middle; display: block; margin-left: auto; margin-right: auto;" src="http://www.alcircle.com/uploads/images/LMEaluminiumMay3.jpg" alt="News" width="517" height="289" /></p> <p>As on May 2, LME official cash buyer price of aluminium stands at US$1,907 per tonne, cash seller &amp; settlement price is US$1,909 per tonne, 3M buyer price is US$1,917 per tonne, 3M seller price is US$1,917.50 per tonne, Dec1 buyer price is US$1,953 per tonne, and Dec1 seller price is US$1,958 per tonne. The current LME official Opening Stock of aluminium is estimated at 1633325 tonnes, total Live Warrants is 991400 tonnes, and Cancelled Warrant is 641925 tonnes.</p> <p>LME aluminium premiums, as on April 28, 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).</p> <p>{googleAdsense}</p> <p>The benchmark aluminium price at Shanghai Metal Exchange (SME) stands at US$2,002 per tonne on Wednesday, May 3, down 1.03 per cent from Tuesday&rsquo;s benchmark price of US$2,023 per tonne.</p> <p>Aluminium futures contracts traded on Shanghai Futures Exchange (SHFE) suffered a loss for the fourth day in a row. SHFE 1706 aluminium after opening at RMB 14,060 per tonne fell back to the 40-day and 60-day moving averages and closed down at RMB 13,830 per tonne because of short selling. SMM expects SHFE 1706 aluminium should look for support at RMB 13,700 per tonne (US$1,987.80).</p> <p>Spot aluminium in China's domestic market is projected to trade at discounts of RMB 100-60 per tonne over SHFE 1705 aluminium on Wednesday, May 3.</p> <p>Market focus will be on API US crude oil stocks, US April ADP employment, the euro zone&rsquo;s Q1 GDP and March PPI, SMM says.&nbsp;</p>