LME aluminium nosedives to US$1,864/t as inventory keeps growing

LME aluminium unable to sustain at US$1,880 per tonne level fell to US$1,864 per tonne on Thursday, June 15. The light metal which edged higher at US$1,886.50 per tonne on Tuesday, June 14, is being weighed on heavily by the growing stocks and slow moving inventory. LME aluminium has come down by 3.4 per cent from its monthly high of US$1,930 per tonne on June 1.

There is a possibility that aluminium prices on LME will inch slightly higher as the US dollar index is plunging. The greenback hit its lowest since November 9 after weak US data on Wednesday; the light metal may gain support from it. However, recent price trend suggests that any rise will be transitory.  

As on June 15, LME official cash buyer aluminium price stands at US$1,863.50 per tonne, cash seller & settlement aluminium price is US$1,864 per tonne, 3M buyer price is US$1,874.50 per tonne, 3M seller price is US$1,875 per tonne, Dec1 buyer price is US$1,908 per tonne, and Dec1 seller price is US$1,913 per tonne. The current LME official Opening Stock of aluminium is estimated at 1436125 tonnes, total Live Warrants is 1031600 tonnes, and Cancelled Warrant is 404525 tonnes.

LME aluminium premiums, as on June 14, 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$1,974 per tonne on Friday, June 16, marginally up by 0.45 per cent from US$1,965 per tonne on June 15. 

At Shanghai Futures Exchange (SHFE), the most active aluminium future contract SHFE 1708 aluminium is trading at lows. Shanghai Metals Market (SMM) observes that the contract will move in the range of RMB 13,450-13,650 per tonne on Friday, June 16, due to rising inventory, weak consumption and tight cash scenario.

Spot aluminium in east China market is expected to trade at discounts of RMB 120-80 per tonne over SHFE 1706 aluminium contract on Friday, June 16.

The market focus will be on the US housing starts data, building permits, LMCI and University of Michigan’s consumer confidence index for June on Friday, June 16, SMM said.