LME aluminium retraces US$1,909/t; SHFE aluminium rebounds after drifting lower

The downtrend in LME aluminium prices seem to be continuing in the foreseeable future. The light metal traded globally retraced US$1,909 per tonne on Thursday, May 4, down 0.3 per cent from the previous day’s close of US$1,916 per tonne. Reuters’ analysis suggests LME aluminium may retest a support at US$1,900 per tonne, a break below which could cause a loss to the next support at US$1,889.

According to Shanghai Metals Market (SMM) forecast, LME aluminium should test support at the 60-day moving average and move at US$1,900-1,925 per tonne on Friday, May 5, weighed upon by the weakness in other base metal markets.

As on May 4, LME official cash buyer price of aluminium stands at US$1,909 per tonne, cash seller & settlement price is US$1,909.50 per tonne, 3M buyer price is US$1,916 per tonne, 3M seller price is US$1,916.50 per tonne, Dec1 buyer price is US$1,952 per tonne, and Dec1 seller price is US$1,957 per tonne. The current LME official Opening Stock of aluminium is estimated at 1609925 tonnes, total Live Warrants is 972000 tonnes, and Cancelled Warrant is 637925 tonnes.

LME aluminium premiums, as on May 3, remain unchanged across major regions. LME Aluminium East-Asia Premium stands at US$110, LME Aluminium US Premium is US$215, LME Aluminium West-Europe Premium is US$95, and LME Aluminium South-East Asia Premium remains unchanged at US$15 (per tonne).

{googleAdsense}

The benchmark aluminium price at Shanghai Metal Exchange (SME) stands at US$2,013 per tonne on Friday, May 5, up 0.7 per cent from Thursday’s benchmark price of US$1,999 per tonne.

Aluminium futures contracts traded at the Shanghai Futures Exchange (SHFE) rebounded after witnessing a drop during the early trading hours of the day. SHFE 1706 aluminium opened at RMB 13,935 per tonne on Thursday, then moved down to RMB 13,855 per tonne before bouncing back to near its daily moving average. The most actively traded contract finally closed at RMB 13,890 per tonne, with volumes up to 281,382 lots, and positions down 4,096 lots to 241,482 lots. SMM predicts that SHFE 1706 aluminium will move at RMB 13,800-14,000 per tonne on Friday, May 5.

Spot aluminium in east China is projected to trade at discounts of RMB 90-50 per tonne over SHFE 1705 aluminium on Friday, May 5.

The market focus will be on the US April non-farm payrolls, jobless rate and wage data on Friday, SMM suggests.