LME aluminium rises but risk of near-term correction remains

<p>LME aluminium reversed its 2-day downtrend to rise 0.67 per cent from Friday's closing at US$1,865.5 per tonne to end at US$1878 per tonne after night trading on Monday, February 20. Shanghai Metals Market (SMM) forecasts the contract will rise further at US$1,890-1,916 per tonne on Tuesday, February 21. However, JP Morgan holds a different viewpoint. The multinational banking and financial services company observed in a recent report that LME aluminium prices are at a risk of correction in the near term as surplus Chinese aluminium production is set to flow into warehousesdragging on global prices.</p> <p>As on February 20, LME official cash buyer price of aluminium stands at US$1,877.5 per tonne, cash seller &amp; settlement price is US$1,878 per tonne, 3M buyer price is US$1,887 per tonne, 3M seller price is US$1,888 per tonne, Dec1 buyer price is US$1,933 per tonne, and Dec1 seller price is US$1,938 per tonne. The current LME official Opening Stock of aluminium is estimated at 2195100 tonnes, total Live Warrants is 1559275 tonnes, and Cancelled Warrant is 635825 tonnes.</p> <p><img style="vertical-align: middle; display: block; margin-left: auto; margin-right: auto;" src="http://www.alcircle.com/uploads/images/LMEAluminiumFeb21.png" alt="News" width="517" height="278" /></p> <p>As on February 17, LME Aluminium US Premium stands at US$215, LME Aluminium West-Europe Premium is US$85, LME Aluminium East-Asia Premium is US$95 and LME Aluminium South-East Asia Premium is US$15.</p> <p>In China, the benchmark price of aluminium on Shanghai Metal Exchange (SME) inched higher at US$2,020 per tonne on Tuesday, February 21, up 0.24 per cent from Monday's price of US$2,015 per tonne.</p> <p>{googleAdsense}</p> <p>Aluminium contract traded on Shanghai Futures Exchange (SHFE) - SHFE 1704 aluminum opened at RMB 14,015 per tonne on Monday and then fluctuated narrowly to close at RMB 14,145 per tonne. SMM says the contract will remain largely range-bound on Tuesday and will find support at RMB 14,000 per tonne. with inventory expansion slowing down SHFE 1704 aluminum is likely to range between RMB 14,250-14,500 per tonne on Tuesday.</p> <p>Spot aluminium in China's domestic market is expected to trade at discounts of RMB 270-230 per tonne on Tuesday.</p>