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21 JUNE 2017 AL CIRCLE

LME aluminium makes a comeback, but will the price rebound sustain?

EDITED BY : DIPANWITA GUPTA 3MINS READ

LME aluminium after lingering at the same level (US$1,861 per tonne) for two consecutive days jumped to US$1,889 per tonne on Tuesday, June 20. The 1.5 per cent rise from the recent low of US$1,861 per tonne marks a comeback for the light metal which has been trending downward for over a week now.

However, market watchers and traders do not seem to be too overwhelmed with the aluminium price rise since negative factors are still simmering. Shanghai Metals Market survey reveals aluminium stocks did not fall as per expectation even during the traditional peak-demand season this year owing to growing supply. So, the downtrend in LME aluminium (and Shanghai aluminium too) will likely continue, at least over short term. Further, the contract is predicted to face resistance at the 10-day moving average.

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News

As on June 20, LME official cash buyer aluminium price stands at US$1,888 per tonne, cash seller & settlement aluminium price is US$1,889 per tonne, 3M buyer price is US$1,899 per tonne, 3M seller price is US$1,899.50 per tonne, Dec1 buyer price is US$1,932 per tonne, and Dec1 seller price is US$1,937 per tonne. The current LME official Opening Stock of aluminium is estimated at 1419325 tonnes, total Live Warrants is 1032475 tonnes, and Cancelled Warrant is 386850 tonnes.

LME aluminium premiums, as on June 19, remain unchanged across major regions. LME Aluminium East-Asia Premium stands at US$110, LME Aluminium South-East Asia Premium remains unchanged at US$15, and LME Aluminium West-Europe Premium is at US$85, and LME Aluminium US Premium is at US$195 (per tonne).

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The benchmark aluminium price at Shanghai Metal Exchange (SME) stands at US$2,018 per tonne on Wednesday, June 21, up 0.69 per cent from the benchmark price of US$2,004 per tonne on June 20.

At Shanghai Futures Exchange (SHFE), the most active aluminium future contract SHFE 1708 aluminium jumped to RMB 14,030 per tonne on June 20, following production cut rumour. The contract later ended down at RMB 13,995 per tonne. SMM predicts that SHFE 1708 aluminium will meet strong resistance at RMB 14,000 per tonne and move in the range of RMB 13,850-14,000 per tonne on Wednesday, June 21.

Spot aluminium in east China market is expected to trade at discounts of RMB 120-80 per tonne over SHFE 1707 aluminium contract on Wednesday, June 21.

China Aluminum International Trading Co. (Chalco Trading) again hiked aluminium prices it offered in major markets today. The revised prices are as follows:

Unit: RMB per tonne

News

The market focus will be on US’s API and EIA crude oil inventory from the week ending June 16 and pending home sales in May on Wednesday, SMM said.


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EDITED BY : DIPANWITA GUPTA 3MINS READ

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