LME aluminium in near-term uptrend as dollar weakens prior to Abe-Trump meeting

LME aluminium recovered from its recent lows to climb higher on Wednesday, January 8. The contract closed at US$1,821 per tonne after yesterday's night trading, up 0.66 per cent from the previous day's closing of US$1,809 per tonne. Shanghai Metals Market forecast says LME aluminium will hover at highs in the near term and test US$1,850 per tonne on Thursday, January 9, moving in the range of US$1,840-1,860 per tonne.

As on February 8, LME official cash buyer price of aluminium stands at US$1,820.5 per tonne, cash seller & settlement price is US$1,821 per tonne, 3M buyer price is US$1,840 per tonne, 3M seller price is US$1,840.5 per tonne, Dec1 buyer price is US$1,895 per tonne, and Dec1 seller price is US$1,900 per tonne. The current LME official Opening Stock of aluminium is estimated at 2254650 tonnes, total Live Warrants is 1655750 tonnes, and Cancelled Warrant is 589650 tonnes.

In China, the benchmark price of aluminium on Shanghai Metal Exchange (SME) has edged higher to stand at US$1,980 per tonne on Thursday, up 1.07 per cent from Wednesday's price of US$1,959 per tonne.

Aluminium traded on Shanghai Futures Exchange- SHFE 1703 aluminum gained on Wednesday, narrowing its price gap with spot aluminium. SMM says the contract will move at RMB 13,780-14,000 per tonne range on Thursday.

Spot aluminium in China's domestic market is expected to trade at discounts of RMB 150-110 per tonne on Thursday.

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Base metals including aluminium prices are expected to remain high on Thursday as speculation is rife that the U.S. President Donald Trump will meet Shinzo Abe late this week and will reiterate his stand against strong US dollar and weak Japanese yen.

“Price support at the lower end for most base metals is solid, and meanwhile, the US dollar is expected to come under pressures as Trump will likely reiterate his opposition to a strong dollar during the upcoming meet with Japan PM Abe,” SMM observes.