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21 FEBRUARY 2017 AL CIRCLE

LME aluminium rises but risk of near-term correction remains

EDITED BY : DIPANWITA GUPTA 2MINS READ

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.

As on February 20, LME official cash buyer price of aluminium stands at US$1,877.5 per tonne, cash seller & 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.

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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.

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.

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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.

Spot aluminium in China's domestic market is expected to trade at discounts of RMB 270-230 per tonne on Tuesday.

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EDITED BY : DIPANWITA GUPTA 2MINS READ

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