LME aluminium inches up but likely to test support at US$1,900/t, SME aluminium drops further

As short-term volatility gripped commodity market, LME aluminium inched up from its early-month drop. The aluminium price on the global bourse stood at US$1,917.50 per tonne on Monday, June 5, up from US$1,916.50 per tonne on Friday, June 2. Shanghai Metals Market (SMM) forecast says LME aluminium will test support at US$1,900 per tonne and range between US$1,890-1,915 per tonne on Tuesday, June 6.

The marginal price rise of LME aluminium can be partially attributed to the oil prices which recouped some of its previous losses on Monday. Overall US dollar sentiment also remains weaker.

As on June 5, LME official cash buyer aluminium price stands at US$1,917 per tonne, cash seller & settlement aluminium price is US$1,917.50 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$1,942 per tonne, and Dec1 seller price is US$1,947 per tonne. The current LME official Opening Stock of aluminium is estimated at 1475100 tonnes, total Live Warrants is 1009850 tonnes, and Cancelled Warrant is 465250 tonnes.

LME aluminium premiums, as on June 2, remain unchanged at their last recorded bands. LME Aluminium East-Asia Premium stands at US$110, LME Aluminium US Premium is US$205, LME Aluminium West-Europe Premium is US$90, and LME Aluminium South-East Asia Premium remains unchanged at US$15 (per tonne).

{googleAdsense}

The benchmark aluminium price at Shanghai Metal Exchange (SME) has dropped further to US$1,996 per tonne on June 6, down from US$2,008 per tonne on June 5, Monday.  

At Shanghai Futures Exchange (SHFE), the most active aluminium future contract SHFE 1707 aluminium opened at RMB 13,840 per tonne on Monday, June 5, and then plunged to RMB 13,720 per tonne. Later during the fag end of the trading hours, the contract rebounded slightly and ended at RMB 13,745 per tonne. SMM suggests that the weakness in SHFE 1707 is unlikely to fade in the short term unless there are some big mover-n-shakers in the market. SHFE 1707 aluminium is predicted to extend its losses to RMB 13,550-13,750 per tonne on Tuesday, June 6.

Spot aluminium in east China market is expected to trade at discounts of RMB 80-40 per tonne over SHFE 1706 aluminium contract on Tuesday, June 6, SMM said.

The market focus will be on Sentix Investor Confidence Index for eurozone in June, eurozone April retail sales and Job openings of JOLTs in April for the US, due for release today.