LME aluminium rises sharply before facing a technical correction this week

LME aluminium ended last week on a high. The light metal traded globally jumped to US$1,938 per tonne on Friday, May 19, the highest in the month so far. The 1.73 per cent rise in LME aluminium price from the previous close of US$1,905 per tonne can be partly attributed to the weak US dollar index, which seems to have given up all its post-election gains lately. Shanghai Metals Market (SMM) prediction says the contract will face technical corrections on Monday, May 22 and range at US$1,885-1,930 per tonne.

The weekly forecast says, LME aluminium will drop slightly this week with no stimulus from the new capacity cut programme.

As on May 19, LME official cash buyer price of aluminium stands at US$1,937.50 per tonne, cash seller & settlement price is US$1,938 per tonne, 3M buyer price is US$1,937.50 per tonne, 3M seller price is US$1,938 per tonne, Dec1 buyer price is US$1,963 per tonne, and Dec1 seller price is US$1,968 per tonne. The current LME official Opening Stock of aluminium is estimated at 1506700 tonnes, total Live Warrants is 964850 tonnes, and Cancelled Warrant is 541850 tonnes.

LME aluminium premiums, as on May 18, 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).

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The benchmark aluminium price at Shanghai Metal Exchange (SME) stands at US$2,020 per tonne on Monday, May 22, up 0.29 per cent from the benchmark aluminium price of US$2,014 per tonne on Friday, May 19.

At Shanghai Futures Exchange (SHFE), the most active aluminium future contract SHFE 1707 opened at RMB 13,980 per tonne on Friday, May 19, and then after a brief uptick fell back to end at RMB 14,030 per tonne. SMM predicts that SHFE aluminium will face pressure from short selling on Monday , May 22 and fluctuate in the range of RMB 13,800-14,100 per tonne.

Spot aluminium in China market is expected to trade at discounts of RMB 140-90 per tonne over SHFE 1706 aluminium contract on Monday, May 22, SMM said.

China Aluminum International Trading Co. (Chalco Trading) raised aluminium prices it offered in major markets on May 22. The prices are as follows:

Unit: yuan/tonne 

The market focus will be on Chicago Fed National Activity Index for April, as well as remarks by President of Philadelphia Federal Reserve and Minneapolis Federal Reserve today.