
The US dollar inched down to close at 94.58 on a stronger Euro before the US Independence Day holiday. Despite that base metals went down on worries over global trade conflicts and weak Chinese manufacturing data released earlier this week. The LME aluminium contract closed slightly higher at US$ 2165 per tonne yesterday July 3 from US$ 2153 per tonne on July 2. However, the contract plummeted to a low of US$2,083 per tonne from a high of US$2,135 per tonne overnight. Shanghai Metals Market expects it to trade at US$2,077-2,117 per tonne today.

As on July 3, LME aluminium cash (bid) price stands at US$ 2163 per tonne, LME official settlement price stands at US$ 2165 per tonne; 3-months bid price stands at US$ 2132 per tonne, 3-months offer price is US$ 2132 per tonne; Dec 19 bid price stands at US$ 2160 per tonne, and Dec 19 offer price stands at US$ 2165 per tonne.
The LME aluminium opening stock increased to 1108900 tonnes. Live Warrants totalled at 906225 tonnes, and Cancelled Warrants were 202675 tonne.
LME aluminium 3-months Asian Reference Price is hovering at US$ 2106.36 per tonne.
SME and SHFE Aluminium Price Trend
The benchmark aluminium price on Shanghai Metal Exchange increased to US$ 2103 per tonne on July 3 from US$ 2068 per tonne on July 2.
The SHFE 1808 contract initially tumbled to a low of RMB 13,905 per tonne as shorts dominated. As market sentiment recovered, the Chinese stock market rebounded and the commodity market regained some losses. The contract later recovered some losses to stand at the RMB 14,025 per tonne level. The contract also fell and broke the RMB 14,000 per tonne level to a low of RMB 13,950 per tonne today morning. The SHFE/LME ratio went up to 6.7 at close. SMM expects the contract to trade at RMB 13,900-14,100 per tonne today with spot discounts at RMB70-30 per tonne. There is limited speculative room for aluminium prices in the short term and the contract is likely to remain rangebound.
China's Caixin services purchasing managers' index (PMI) is the key factor to watch today.
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