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30 NOVEMBER 2016 AL CIRCLE

LME Aluminium moves lower, China expected to tighten liquidity

EDITED BY : DIPANWITA GUPTA 2MINS READ

LME aluminium is continuing its downward trend. After staging a temporary reversal on November 24, when it touched US$1,774/mt, the contract took a sharp south-bound turn and has been declining since then. It closed at US$1,722/mt after Tuesday's night trading, down 2.51% from the previous closing of US$1,766.50/mt on Monday.  

The contract will test the 40-day moving average on Wednesday and is expected to move between US$1,700-1,725/mt, forecasts Shanghai Metals Market.

LME official 3M Buyer price as on November 29, stands at US$1,723.5/mt, 3M Seller price is US$1,724/mt, Dec1 Buyer price is US$1,738/mt and Dec1 Seller Price is US$1,743/mt. LME official opening stocks is estimated at 2158275mt.

As on November 26, LME Aluminium US Premium stands at US$170, LME Aluminium West-Europe Premium is at US$80, LME Aluminium East-Asia Premium is US$65 and LME Aluminium South-East Asia Premium is US$15.

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In China, aluminium traded on Shanghai Metal Exchange is also sliding further down. The contract after closing at US$2,077/mt on Tuesday opened at US$2,029/mt on Wednesday.

Aluminium prices on Shanghai Futures Exchange are also predicted to remain on a downward track on Wednesday. SHFE1702 will keep moving lower with the market negative sentiment and will test the 40-day moving average and range at RMB13,100-13,400/mt, SMM foresees.

Spot premiums in China's domestic market will continue falling to RMB 130-170/mt on Wednesday.

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Eurozone November CPI will be released today. It is expected to be upbeat due to Quantitative Easing by European Central Bank. ADP’s November employment data due for release today evening is expected to rise to above 160,000 keeping the US dollar strong. China is expected to be tightening its liquidity by large institutions. And finally, if the proposed agreement on oil output cut fails to be reached at the upcoming OPEC countries' meet, short term momentum may grow.   

“A series of major economic data is going to be released today ... and market caution is arising in the market,” SMM says. 

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EDITED BY : DIPANWITA GUPTA 2MINS READ

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