LME aluminium likely to retest support at US$1,894/t; Chalco cuts prices

LME aluminium could not hold ground after closing at US$1,915.50 per tonne on Tuesday, April 18, the first trading day after the Easter Holidays. The light metal contract staged a technically rally during night trading on Wednesday, April 19, only to end at US$1,895.50 per tonne, down 1.04 per cent from its previous day's closing price. Shanghai Metals Market (SMM) foresees that LME aluminium will move between the 5-day and 10-day moving averages on Thursday, April 20, with price ranging at US$1,905-1,935 per tonne.

Reuters analyses that LME aluminium may retest a support at US$1,894 per tonne, a break below which could cause a loss into the range of US$1,874-$1,885.

As on April 19, LME official cash buyer price of aluminium stands at US$1,894.50 per tonne, cash seller & settlement price is US$1,8955.50 per tonne, 3M buyer price is US$1,908 per tonne, 3M seller price is US$1,909 per tonne, Dec1 buyer price is US$1,947 per tonne, and Dec1 seller price is US$1952 per tonne. The current LME official Opening Stock of aluminium is estimated at 1713250 tonnes, total Live Warrants is 1102550 tonnes, and Cancelled Warrant is 610700 tonnes.

LME aluminium premiums, as on April 13, remain fairly unchanged across major regions except in East Asia. LME Aluminium East-Asia Premium has inched higher at US$110 from the earlier US$105 (per tonne). LME Aluminium US Premium stands at US$215, LME Aluminium West-Europe Premium stands at US$95, and LME Aluminium South-East Asia Premium remains unchanged at US$15 (per tonne).

The benchmark aluminium price at Shanghai Metal Exchange (SME) on April 20 is US$2,026 per tonne, down 1.02 per cent from yesterday's price of US$2,047 per tonne.

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Aluminium futures contracts traded on Shanghai Futures Exchange (SHFE) showed wide-range fluctuations on Wednesday. SHFE 1706 aluminium opened at RMB 14,240 per tonne and then climbed to RMB 14,365 per tonne before falling back at RMB 14,255 per tonne on April 19. The contract should move around the 5-day and 20-day moving averages during Thursday's night session, predicts SMM. Price should range at RMB 14,000-14,350 per tonne.

Spot aluminium in China's domestic market is projected to trade at discounts of RMB 160-120 per tonne over SHFE 1705 aluminium on Thursday, April 20.

China Aluminum International Trading Co. (Chalco Trading) cut aluminium prices it offered in major markets. The details are as follows:

Unit: yuan/tonne 

The market should watch out for the US’s initial jobless claim from the week ending April 14 and fresh reading of eurozone’s consumer confidence index in April on Thursday, says SMM.