LME aluminium slumps yesterday but recovered overnight with limited momentum; SHFE follows trend

The US dollar index slumped against the euro and sterling, which were buoyed by optimism that Britain would reach a deal with the European Union (EU) on the terms of its departure from the trade bloc.

Base metals closed mixed. LME aluminium closed the day's trading lower at US$ 1985 per tonne on Monday. Later it climbed up during the European trading session, with limited momentum. It closed at US$2,033.5 per tonne after rising to a high of US$2,043 per tonne.

As on September 17, LME aluminium cash (bid) price stands at US$ 1984.50 per tonne, LME official settlement price stands at US$ 1985 per tonne; 3-months bid price stands at US$ 2017 per tonne, 3-months offer price is US$ 2017.50 per tonne; Dec 19 bid price stands at US$ 2050 per tonne, and Dec 19 offer price stands at US$ 2055 per tonne. 

The LME aluminium opening stock dropped to 1041025 tonnes. Live Warrants totalled at 723350 tonnes, and Cancelled Warrants were 317675 tonne.

LME aluminium 3-months Asian Reference Price is hovering at US$ 2009 per tonne.

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange continues its flat pattern and drops to US$ 2102 per tonne today from US$ 2107 per tonne on September17. 

The SHFE 1811 contract hovered around RMB 14,470 per tonne before it fell to RMB 14,430 per tonne yesterday, a new low in close to three weeks. The contract ended lower than open prices. The 1809 contract finished its last trading day down 0.72% at RMB 14,400 per tonne. Cautious investors kept the contract within RMB 14,455-14,505 per tonne overnight on Monday. The contract is expected to trade at RMB14,440-14,550 per tonne today with spot discounts at RMB 60-20 per tonne. 

The market will follow closely the development of fresh US tariffs on $200 billion worth of Chinese goods. We expect the 1811 contract to continue its weak and rangebound pattern.