
The US dollar dipped against the pound and euro, which marched higher following the news that a draft agreement had been struck between the UK and the EU.
LME aluminium has recovered some losses this week after dropping continuously since the second week of November. The contract closed Thursday’s trading at US$ 1941.50 per tonne, slightly lower than the previous closing. Upward momentum is seen in LME aluminium in the short run, as concerns over slow pace in interests rate hikes by US Fed will weigh on the dollar. The contract is likely to trade at US$1,940-1,970 per tonne today. The gap between the cash prices and future prices continues to grow bigger.
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As on November 22, Thursday, LME aluminium cash (bid) price stood at US$ 1941per tonne, LME official settlement price stands at US$ 1941.50 per tonne; 3-months bid price stands at US$ 1953 per tonne, 3-months offer price is US$ 1953.50 per tonne; Dec 19 bid price stands at US$ 2017 per tonne, and Dec 19 offer price stands at US$ 2022 per tonne.
The LME aluminium opening stock dropped to 1070400 tonnes. Live Warrants totalled at 797525 tonnes, and Cancelled Warrants were 272875 tonnes.
LME aluminium 3-months Asian Reference Price is hovering at US$ 1957 per tonne.
SME and SHFE Aluminium Price Trend
The benchmark aluminium price on Shanghai Metal Exchange increases slightly to US$ 1994 per tonne today from US$ 1986 per tonne on November 21.
The SHFE 1901 contract extended overnight gains to close at RMB 13,805 per tonne yesterday on the market talk of winter production curbs of about 10% in Liaocheng of Shandong province. The SHFE contract then extended its daytime increase overnight and jumped to a high of RMB 13,865 per tonne. As some longs took profits and left, it settled at RMB 13,830 per tonne, with open interest up 670 lots to 257,780 lots. The rise is unlikely to sustain in the short term due to sluggish demand as reflected in a slower decline in domestic social stocks of primary aluminium. The contract will trade at RMB13,850-13,750 per tonne today with spot discounts at RMB 60-20 per tonne.
Aluminium prices are likely to remain weak in the short term amid weakening consumption and falling costs of alumina.
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