LME aluminium rebounded to a three-day high yesterday; SHFE recovered losses on consumption recovery

The US dollar dipped against a basket of currencies on Thursday after the US Federal Reserve Wednesday cut interest rates by 25 basis points. LME base metals closed mixed on Thursday. LME aluminium gained 0.2%, while aluminium inched up 0.2%.

LME continued its upward momentum yesterday. Three-month LME aluminium rebounded to a three-day high of US$1,803 per tonne on Thursday, before it eased to close 0.17% higher at US$1,795 per tonne. It is expected to hover between US$1,780-1,830 per tonne today.

As on September 19, Thursday, LME aluminium cash (bid) price stood at US$ 1762 per tonne, LME official settlement price stands at US$ 1762.50 per tonne; 3-months bid price stands at US$ 1790 per tonne, 3-months offer price is US$ 1792 per tonne; Dec 20 bid price stands at US$ 1855 per tonne, and Dec 20 offer price stands at US$ 1860 per tonne.

The LME aluminium opening stock dropped to 900725 tonnes. Live Warrants totalled at 700775 tonnes, and Cancelled Warrants were 199950 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1785 per tonne.

SME and SHFE Aluminium Price Trend

Benchmark aluminium price for SHFE (Shanghai Future Exchange) stood at USD2046 per tonne.

As longs continued to cover their positions, the most-active SHFE November contract extended losses from the previous three sessions, ending down 0.81% on the day at RMB 14,135 per tonne. Short-covering helped the most traded SHFE 1911 contract recover from earlier losses overnight, gaining 0.21% to close at RMB 14,190 per tonne. The SHFE 1911 contract is expected to trade between RMB 14,050-14,300 per tonne today, with spot premiums of RMB 20-40 per tonne over the 1910 contract.

Social inventories of primary aluminium in China fell for the fourth straight week as of Thursday, suggesting decent downstream consumption. This will continue to support price in the short term.