LME aluminium plunged yesterday with dollar's gain; SHFE likely to trade higher on positive fundamentals

The US dollar was modestly higher against the yen on Wednesday. The dollar index rose 0.21% to 98.21. LME base metals closed mixed and SHFE metals ended mostly higher. LME aluminium fell 0.62% and SHFE aluminium increased 0.24%.

LME aluminium plunged during yesterday’s trading. Three-month LME aluminium fell for the seventh straight session as shorts added their positions and the US dollar gained. It finished the trading day 0.62% lower at US$1,749 per tonne last night, with open interest up 5,204 lots to 756,000 lots. It is likely to be trading around US$1,745 per tonne today.

As on August 28, Wednesday, LME aluminium cash (bid) price stood at US$ 1723.50 per tonne, LME official settlement price stands at US$ 1724 per tonne; 3-months bid price stands at US$ 1758 per tonne, 3-months offer price is US$ 1758.50 per tonne; Dec 20 bid price stands at US$ 1843 per tonne, and Dec 20 offer price stands at US$ 1848 per tonne.

The LME aluminium opening stock increased to 936225 tonnes. Live Warrants totalled at 672675 tonnes, and Cancelled Warrants were 263550 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1763 per tonne.

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange (SME) has increased to US$ 1998 per tonne today from US$ 1995 per tonne on Wednesday.

As longs loaded up positions, the most traded SHFE 1910 contract extended overnight gains to a three-day high of RMB 14,350 per tonne, before it eased to end 0.32% higher at RMB 14,290 per tonne. The October contract traded rangebound with a high of RMB 14,340 per tonne, before it gave up gains to end up 0.24% at RMB 14,325 per tonne as longs booked profits and left. The contract is likely to hover between RMB 14,280-14,350 per tonne today. 

SHFE aluminium is expected to trade rangebound at highs tonight, with near-term headwinds seen from potential supply recovery.