LME aluminium price shrinks as US dollar price recovers from its six-month low; SHFE aluminium drops too

The US dollar recovered from a six-month low on Thursday, the year’s first trading day, as demand for the safe-haven dollar picked up after bleak data out of Germany and the UK weighed on the euro and pound. The dollar index, which tracks the greenback against a basket of other currencies, finished up 0.3% at 96.82.

Three-month LME aluminium fell to a two-week low of $1,786 per tonne before it trimmed some losses and finished at $1,800.5 per tonne, as investors covered their bullish position. Trading range is seen between US$1,790-1,820 per tonne.

As on January 2, Thursday, LME aluminium cash (bid) price stood at US$ 1771 per tonne, while LME official settlement price at US$ 1772 per tonne; 3-months bid price came in at US$ 1803 per tonne, 3-months offer price at US$ 1830.5 per tonne; Dec 20 bid price stood at US$ 1933 per tonne, and Dec 20 offer price at US$ 1938 per tonne.

LME aluminium 3-months Asian Reference Price hovered at US$ 1812.30 per tonne.

SHFE Aluminium Price Trend

After a steep rise from US$ 1772 per tonne to US$ 2068 per tonne, the benchmark aluminium price for SHFE (Shanghai Future Exchange) dropped to US$ 2065 per tonne, as of today, January 3, 2019.

The most traded SHFE 2002 contract gave back earlier gains to close the day flat at RMB 14,090 per tonne, as data showed an increase in social inventories of primary aluminium ingots in China due to greater arrivals and weaker demand. Inventories are likely to maintain the growth ahead of the Lunar New Year holiday, which will weigh on prices. Over the night, the most-traded SHFE 2002 contract halted its four straight sessions of increase, ending lower at RMB 14,000 per tonne. Weakened downstream demand after the New Year’s Day holiday dampened confidence in longs and weighed on prices. The contract today is likely to hover between RMB 13,900-14,100 per tonne today.