LME aluminium moves higher, but will likely fluctuate with the dollar gaining strength this week

LME Aluminium is likely to be affected by the oil futures that ended slightly higher on Friday, logging a consecutive fourth weekly gain on speculations that major producers would cut output as pledged. The contract ended at US$1,722 per tonne on Friday, marginally higher by 0.73 per cent than the previous day, and on Monday, it is expected to fluctuate during the Asian trading hours, being affected by Shanghai aluminium futures. Shanghai Metals Market (SMM) says LME aluminium will hover in the range of US$1,705-1,725 per tonne on Monday.

As on January 6, LME official cash buyer price of aluminium stands at US$1,721.5, cash seller & settlement price is US$1,722 per tonne, 3M buyer price is US$1,711.5 per tonne, 3M seller price is US$,712 per tonne, Dec1 buyer price is US$1,760 per tonne, and Dec2 buyer price is US$1,765 per tonne. LME official opening stock of aluminium currently stands at 2222450 per tonne, total live warrants is 1554025 tonnes, and cancelled warrant is 663000 tonnes.


In China, the benchmark price of aluminium at Shanghai Metal Exchange dropped from US$1,835 per tonne on Thursday to US$1,825 per tonne on Friday last week. Aluminium traded on Shanghai Futures Exchange is expected to keep fluctuating on Monday affected by a soft spot aluminium; SHFE 1703 aluminium will move at RMB 12,550-12,700 per tonne, says SMM.

Spot aluminium in China's domestic market should trade at discounts of RMB 20 per tonne to premiums of RMB 20 per tonne on Monday.

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A host of trade data, all of which seems promising, is awaiting release this week. The US dollar will strengthen, weighing on crude oil prices. So, if that happens, aluminium prices will go down.

“SHFE and LME base metals last Friday’s night trading closed higher except tin, while a strong dollar will exert negative impact on the market, and bound-range trading is expected on Monday,” SMM says.