LME aluminium picks up momentum on the prospects of Chinese capacity closures

The uptrend in LME aluminium is finally on solid tracks. The light metal which hit the highs after more than two-and-a-half-years crossed the US$2,000 per tonne barrier to close at US$2,018 per tonne on Wednesday, August 9, rising from the earlier close of US$1,981 per tonne on August 8. With investors flooding the world market on the prospects of wide-scale capacity closures by the biggest aluminium producing region, China, the aluminium prices are expected to hover at highs in the foreseeable future.

According to Shanghai Metals Market forecast, LME aluminium will trade at US$2,005-2,035 per tonne on Thursday, August 10.

As on August 9, LME official cash buyer aluminium price (Bid Price) stands at US$2,017 per tonne, cash seller & settlement aluminium price (Offer price) is US$2,018 per tonne, 3M Bid Price is US$2,023 per tonne, 3M Offer Price is US$2,024 per tonne, Dec1 Bid Price is US$2,065 per tonne, and Dec1 Offer Price is US$2,070 per tonne. LME aluminium Opening Stock stands at 1302825 tonnes, total Live Warrants is 1033075 tonnes, and Cancelled Warrant is 269750 tonnes.

LME aluminium premiums remain unchanged across major global markets. 

SME and SHFE Aluminium Price Trend

The benchmark aluminium price at Shanghai Metal Exchange (SME) has extended its gains to US$2,377 per tonne on Thursday, August 10, rising from US$2,353 on Wednesday, August 9.  

At Shanghai Futures Exchange (SHFE), the most active aluminium future contract SHFE 1710 opened at RMB 15,545 per tonne on Wednesday, and then surged to RMB 16,330 per tonne. Later, the contract slowed down a bit before closing at RMB 16,215 per tonne. SMM predicts that aluminium prices will regain losses and trade in the range of RMB 16,00-16,250 per tonne on Thursday, August 10.

Spot aluminium in east China market is expected to trade at discounts of RMB 220-180 per tonne over SHFE 1708 aluminium on Thursday.

The market focus will be on UK June industrial output, US July PPI, the number of initial jobless claims for the week ending August 5 and Fed Dudley’s statement on Thursday, SMM said.