The US dollar index recovered to 97 on Wednesday as US stocks rebounded from Christmas, though uncertainty about the US government shutdown and Federal Reserve monetary policy remained a headwind.
The LME was closed on Tuesday for Christmas and on Wednesday for Boxing Day and hence no trading took place in the exchange. LME aluminium closed the trading on 24th December at US$ 1898.50 per tonne, lowest in last two years. The contract is likely to try to regain losses made before Christmas Day, and trade within a range of US$1,880-1,910 per tonne.
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SME and SHFE Aluminium Price Trend
The benchmark aluminium price on Shanghai Metal Exchange dropped to US$ 1966 per tonne today from US$ 1990 per tonne on December 26.
A lack of confidence in longs dragged the SHFE 1902 contract at noon yesterday, after it traded above the daily moving average and rose to an intraday high of RMB 13,870 per tonne in the morning. It still closed higher on the day at RMB13,790 per tonne, with open interests down 5,682 lots to 2,852 lots.
The downward trend in LME has affected the movements in SHFE aluminium. SHFE base metals, except for aluminium, traded higher overnight. The SHFE 1902 contract initially dropped to a low of RMB 13,730 per tonne overnight as longs aggressively reduced positions. It hovered between the 20- and 40-day moving averages to end at RMB 13,765 per tonne. The contract is expected to trade at RMB13,720-13,800 per tonne today with spot discounts at RMB 110-70 per tonne.
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