
The US dollar’s rally paused while the euro rose as the equity selloff eased and demand for risk-averse commodities fell. The greenback was under pressure on some unexpectedly weak US economic data. The pound inched up after a parliamentary group failed to challenge Prime Minister Theresa May’s leadership. Base metals increased for the most part.
LME aluminium is showing some upward movement after dropping continuously since the second week of November. The contract closed Wednesday’s trading at US$ 1945 per tonne, higher than the previous closing. Then it increased above the five- and 10- day moving averages as the US dollar dipped. With resistance at the 20-day moving average, it is likely to trade at US$1,945-1,960 per tonne today.
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As on November 21, Wednesday, LME aluminium cash (bid) price stood at US$ 1944 per tonne, LME official settlement price stands at US$ 1945 per tonne; 3-months bid price stands at US$ 1953 per tonne, 3-months offer price is US$ 1953.50 per tonne; Dec 19 bid price stands at US$ 2013 per tonne, and Dec 19 offer price stands at US$ 2018 per tonne.
The LME aluminium opening stock dropped to 1072525 tonnes. Live Warrants totalled at 799175 tonnes, and Cancelled Warrants were 273350 tonnes.
LME aluminium 3-months Asian Reference Price is hovering at US$ 1946 per tonne.
SME and SHFE Aluminium Price Trend
The benchmark aluminium price on Shanghai Metal Exchange increases slightly to US$ 1986 per tonne today from US$ 1975 per tonne on November 21.
The SHFE 1901 contract reversed some overnight losses to end at RMB13,745 per tonne yesterday, still below the five-day moving average. The spread between the 1812 and 1901 contracts flipped into backwardation in anticipation of value-added tax cuts. Spot discounts did not narrow. Aluminium prices remained weak on expected declines in alumina prices and continued sluggish demand.
Market talks about 10% production cuts in Liaocheng of Shandong province buoyed the SHFE 1901 contract to a high of RMB 13,780 per tonne after opening of the night session. However, heavy pressure above at the 10-day moving average settled it at RMB 13,755 per tonne, remaining above the five-day moving average. It is unlikely to break pressure at the 10-day moving average today; with trading range set at RMB 13,700-13,800 per tonne.
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