LME aluminium nears a technical correction, SHFE aluminium drops on short selling

LME aluminium prices are on a steady downtrend.  The light metal contract traded globally closed at US$1,879 per tonne on Monday, May 8, down 1.46 per cent from its previous close of US$1,907 per tonne on Friday, May 5. After the fourth day consecutive of descent Shanghai Metals Market (SMM) suggests that LME aluminium may face brief technical corrections and move in the range of US$1,860-1,890 per tonne on Tuesday, May 9.

As on May 8, LME official cash buyer price of aluminium stands at US$1,878.50 per tonne, cash seller & settlement price is US$1,879 per tonne, 3M buyer price is US$1,83 per tonne, 3M seller price is US$1,884 per tonne, Dec1 buyer price is US$1,923 per tonne, and Dec1 seller price is US$1,928 per tonne. The current LME official Opening Stock of aluminium is estimated at 1592300 tonnes, total Live Warrants is 967950 tonnes, and Cancelled Warrant is 624350 tonnes.

LME aluminium premiums, as on May 5, remain unchanged across major regions. LME Aluminium East-Asia Premium stands at US$110, LME Aluminium US Premium is US$215, LME Aluminium West-Europe Premium is US$95, and LME Aluminium South-East Asia Premium remains unchanged at US$15 (per tonne).

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The benchmark aluminium price at Shanghai Metal Exchange (SME) stands at US$1,975 per tonne on Tuesday, May 9, down 0.7 per cent from Monday’s benchmark price of US$1,989 per tonne.

Aluminium futures contracts traded at the Shanghai Futures Exchange (SHFE) tumbled on short selling on Monday. SHFE 1706 aluminium after opening at RMB 13,960 per tonne fell to a low of RMB 13,650 per tonne due to short selling. SMM says poor market fundamentals and dwindling effect of speculation over environmental policy caused the prices to nosedive at the bourse. SHFE 1706 aluminium is expected to test support at RMB 13,750 per tonne and move between RMB 13,700-13,950 per tonne on Tuesday, May 9.

China Aluminum International Trading Co. cut aluminium prices it offered in major markets today. The prices are as follows:

Unit: yuan/tonne 

Spot aluminium in east China is projected to narrow to RMB 0-40 per tonne over SHFE 1705 aluminium on Tuesday, said SMM.

The market focus will be on China’s April credit and aggregate financing, US’s March JOLTs job vacancy and March’s wholesale inventory data on Tuesday, SMM suggests.