LME aluminium regains strength while SHFE aluminium shows ‘signs of stopping declines’

The London Metal Exchange market opened yesterday after the Easter Holidays; LME aluminium that has been falling since April 5, finally regained some strength and closed at US$1,915.50 per tonne, up 1.34 per cent from its previous close of US$1,890 per tonne on April 13, Thursday. As Shanghai Metals Market (SMM) finds it, the light metal contract will see technical rally on Wednesday, April 19, and move at US$1,890-1,930 per tonne.

As on April 18, LME official cash buyer price of aluminium stands at US$1,915 per tonne, cash seller & settlement price is US$1,915.50 per tonne, 3M buyer price is US$1,928 per tonne, 3M seller price is US$1,930 per tonne, Dec1 buyer price is US$1,968 per tonne, and Dec1 seller price is US$1973 per tonne. The current LME official Opening Stock of aluminium is estimated at 1745750 tonnes, total Live Warrants is 1099250 tonnes, and Cancelled Warrant is 646500 tonnes.

LME aluminium premiums remain unchanged at their previous levels across major global markets. As on April 13, LME Aluminium US Premium stands at US$215, LME Aluminium West-Europe Premium stands at US$95, LME Aluminium East-Asia Premium is US$105 and LME Aluminium South-East Asia Premium is US$15 (per tonne).

The benchmark aluminium price on Shanghai Metal Exchange (SME) has dropped from its previous high. It is US$2,047 per tonne as on April 19, down 1.53 per cent from Tuesday's benchmark price of US$2,079 per tonne.

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Aluminium futures contracts traded on Shanghai Futures Exchange (SHFE) staged a drastic decline overnight. SHFE 1706 aluminium after opening at RMB 14,470 per tonne on Tuesday shot up to RMB 14,565 per tonne, and then fell back to around RMB 14,500 per tonne dragged down by the plunge in ferrous metals. SMM observes that SHFE aluminium will likely see limited downward correction and struggle around RMB 14,500 per tonne in the near term.

Spot aluminium in China's domestic market is projected to trade at discounts of RMB 190-150 per tonne over SHFE 1705 aluminium on Wednesday, April 19.

The market should watch out for the release of US’s EIA and API crude oil inventories from the week ending April 14, eurozone’s March CPI and Italy’s February trade balance data, says SMM.