LME aluminium recovers some lost ground, but may struggle at moving averages

After a four-day falling streak, LME aluminium regained some lost strength and edged higher to US$1,861.50 per tonne on Tuesday, June 27, up from the monthly low of US$1,855 per tonne on Monday, June 26. Oil prices surged two per cent and US dollar index dropped sharply lending some support to the light metal traded globally.  

Shanghai Metals Market observes that LME aluminium may inch further up but will continue to struggle between the 10-day and 20-day moving averages. Aluminium prices on the bourse will range US$1,877-US$1,891 per tonne on Wednesday, June 28.

As on June 27, LME official cash buyer aluminium price stands at US$1,861 per tonne, cash seller & settlement aluminium price is US$1,861.50 per tonne, 3M buyer price is US$1,871 per tonne, 3M seller price is US$1,872 per tonne, Dec1 buyer price is US$1,905 per tonne, and Dec1 seller price is US$1,910 per tonne. The current LME official Opening Stock of aluminium is estimated at 1420150 tonnes, total Live Warrant is 1062075 tonnes, and Cancelled Warrant is 358075 tonnes.

LME aluminium premiums are down across three major regions. As on June 26, LME Aluminium US Premium stands at US$190, down from the earlier US$195; LME Aluminium West-Europe Premium is US$80, down from US$85; LME Aluminium East-Asia Premium is US$105, down from US$110; and LME Aluminium South-East Asia Premium remains unchanged at US$15 (per tonne).

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The benchmark aluminium price at Shanghai Metal Exchange (SME) stands at US$2,016 per tonne on Wednesday, June 28, up 1.35 per cent from the previous day’s benchmark price of US$1,989 per tonne.

At Shanghai Futures Exchange (SHFE), the most active aluminium future contract SHFE 1708 aluminium opened at RMB 13,740 per tonne on Tuesday, June 27 and then fell to RMB 13,700 per tonne weighed upon by the exit of longs. SMM predicts that SHFE 1708 aluminium will test resistance at the 60-day moving average and move at RMB 13,850-14,000 per tonne on Wednesday, June 28.  

Spot aluminium in east China market is expected to trade at discounts of RMB 150-110 per tonne over SHFE 1707 aluminium contract on Wednesday.

China Aluminum International Trading Co. (Chalco Trading) hiked aluminium prices it offered in major markets today after the price cut yesterday. The revised prices are as follows:

Unit: RMB per tonne

The market focus will be on the US crude oil inventory, seasonally adjusted existing home sales in May and whole sale and retail sale inventories for the US and inflation in Germany and Italy on Wednesday, SMM said.