LME aluminium may rise slightly before testing resistance at US$2,125/t

LME aluminium slid below US$2,100 per tonne mark last week due to subdued demand and strong dollar. The light metal contract ended slightly higher on Friday, November 10, at US$2,090 per tonne, rising from US$2,078 per tonne on November 9. Reuters’ technical analysis suggests that LME aluminium may end this bounce around a resistance at US$2,125 per tonne, and then retrace its current lows.

A drop around US$2,097.50 per tonne could indicate at a further extension of the downtrend towards US$2,046, while a break above US$2,125 per tonne could lead to a gain to US$2,148 per tonne in the near term.

As on November 10, LME official cash buyer aluminium price (Bid Price) stands at US$2,089 per tonne, cash seller & settlement aluminium price (Offer price) is US$2,090 per tonne, 3M Bid Price is US$2,103 per tonne, 3M Offer Price is US$2,104 per tonne, Dec1 Bid Price is US$2,148 per tonne, and Dec1 Offer Price is US$2,153 per tonne. LME aluminium Opening Stock or the LME aluminium inventory level stands at 1168375 tonnes, total Live Warrants is 913000 tonnes, and Cancelled Warrant is 255375 tonnes.                 

As on November 10, spot price against 3-month futures price traded at discount of US$16.5 per tonne.              

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange has edged higher from US$2,305 per tonne on November 10, to US$2,313 per tonne on November 13.  

In China domestic market, aluminium price is keeping volatile due to weak consumption and growing inventory pressure. The most active Contract 1801 of SHFE Aluminium is estimated to drop to RMB 15,000-15,500 per tonne in the short term, Shanghai Metals Market predicted.

Attention should be on China’s volume of social financing data and M2 money supply which will be released today.  The details of the US tax reform, the key macroeconomic factor influencing USD’s trend shall be a prime focus as well.