LME aluminium to gain strength as dollar turns lower, SMM predicts

The U.S. dollar index has been gaining in strength over the past week. On Friday, February 3, it surrendered its gain but that could do little to buoy aluminium prices up. LME aluminium dropped further to close at US$1,808.50 per tonne after Friday's night trading, down 0.24 per cent from previous day's closing at US$1,813 per tonne. The contract is expected to range between US$1,850 per tonne on Monday.

As on February 3, LME official cash buyer price of aluminium stands at US$1,808 per tonne, cash seller & settlement price is US$1,808.5 per tonne, 3M buyer price is US$1,815 per tonne, 3M seller price is US$1,815.5 per tonne, Dec1 buyer price is US$1,858 per tonne, and Dec1 seller price is US$1,863 per tonne. The current LME official Opening Stock of aluminium is estimated at 2263025 tonnes, total Live Warrants is 1643175 tonnes, and Cancelled Warrant is 612825 tonnes.

In China, the benchmark price of aluminium on Shanghai Metal Exchange (SME) stands at US$1,947 per tonne on Monday, February 6, up 0.15 per cent from the previous day's price of US$1,944 per tonne.

According to Shanghai Metals Market (SMM) forecast, aluminium prices on Shanghai Futures Exchange (SHFE) will test RMB 14,000 per tonne. SHFE 1703 will move at RMB 13,800-14,000 per tonne on Monday. “Monday will be a light data calendar, and Chinese investors will be gradually returning from the holiday, and base metal prices are expected to diverge,” SMM says.

Spot aluminium in China's domestic market is expected to trade at discounts of RMB 290-250 per tonne on Monday with the end of 2017 Chinese Lunar New Year hliday.

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The National Bureau of Statistics (NBS) reported output of ten nonferrous metals in China increased 9.2 per cent to total 4.73 million tonnes in December 2016. Output of primary aluminum was 31.87 million tonnes in 2016, up 1.3 per cent year-on-year.