LME aluminium June story ends in a gain, but will the momentum continue?

LME aluminium after trending down for almost a month now edged higher above the US$1,900 per tonne level and closed at US$1,908 per tonne after night trading on Friday, June 30. Though the light metal is still 1.13 per cent down from its beginning-of-month price (US$1,900 per tonne) it has risen from the month-low of US$1,855 per tonne by 2.58 per cent. Despite the gain, market analysts do not seem to be much optimistic about the metal’s medium term outlook.

Shanghai Metals Market thinks that LME aluminium will “run out of steam” and range at US$ 1,910-1,930 per tonne on Monday, July 3. The contract is likely to meet strong resistance at the 60-day moving average, SMM forecasts.

As on June 30, LME official cash buyer aluminium price stands at US$1,908 per tonne, cash seller & settlement aluminium price is US$1,908.50 per tonne, 3M buyer price is US$1,914 per tonne, 3M seller price is US$1,915 per tonne, Dec1 buyer price is US$1,950 per tonne, and Dec1 seller price is US$1,955 per tonne. The current LME official Opening Stock of aluminium is estimated at 1411675 tonnes, total Live Warrant is 1068225 tonnes, and Cancelled Warrant is 343450 tonnes.

LME aluminium premiums remain unchanged across major regions today. As on June 29, LME Aluminium US Premium stands at US$190, LME Aluminium West-Europe Premium is US$80, LME Aluminium East-Asia Premium is US$105, and LME Aluminium South-East Asia Premium remains unchanged at US$15 (per tonne).

{googleAdsense}

The benchmark aluminium price at Shanghai Metal Exchange (SME) stands at US$2,042 per tonne on Monday, July 3, up 0.98 per cent from the last benchmark price of US$2,022 per tonne on Friday, June 30.

At Shanghai Futures Exchange (SHFE), the most active aluminium future contract SHFE 1708 aluminium opened at RMB 14,005 per tonne on Friday, June 30, and then dived to RMB 13,815 per tonne. Later, the contract rose following other base metals and settled at RMB 13,920 per tonne. SMM predicts that SHFE 1708 aluminium will move at RMB 13,900-14,070 per tonne on Monday, July 3.  The aluminium output cut by the government, SMM observes, is not going to offer any sustainable upward thrust to the aluminium prices.

Spot aluminium in east China market is expected to trade at discounts of RMB 150-110 per tonne over SHFE 1707 aluminium contract on Monday.

The market focus will be on June manufacturing PMI from China, the euro zone, Germany, France, the UK and the US on Monday, SMM said.