LME aluminium to move in a tight range; SHFE aluminium will test support at US$2030.34/t

LME aluminium ended last week in a drop. The light metal contract traded globally registered a drop of 1.25 per cent from its previous close to end at US$1,930 per tonne on Friday, April 28. Yesterday being the Early May Bank Holiday at the London Metal Exchange, trading will resume today. Shanghai Metals Market (SMM) predicts LME aluminium should move at the range of US$1,908-1,935 per tonne on Tuesday, May 2. It is likely to hover around the 40-day moving average.

As per Reuters' analysis, LME aluminium may retest a support at US$1,908 per tonne, probably after a further bounce into the range of US$1,931-$1,941. "The metal has briefly pieced above US$1,921. It has a better chance of extending to US$1,931, or to US$1,941, Retuters observes.

As on April 28, LME official cash buyer price of aluminium stands at US$1,929.50 per tonne, cash seller & settlement price is US$1,930 per tonne, 3M buyer price is US$1,937 per tonne, 3M seller price is US$1,938 per tonne, Dec1 buyer price is US$1,973 per tonne, and Dec1 seller price is US$1,978 per tonne. The current LME official Opening Stock of aluminium is estimated at 1645375 tonnes, total Live Warrants is 991400 tonnes, and Cancelled Warrant is 653975 tonnes.

LME aluminium premiums, as on April 27, 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$2,023 per tonne on Tuesday, May 2, down 0.73 per cent from Friday’s benchmark price of US$2,038 per tonne.

Aluminium futures contracts traded on Shanghai Futures Exchange (SHFE) suffered a significant nosedive during Friday’s night trading. SHFE 1706 aluminium after opening at RMB 14,230 per tonne went down at RMB 13,990 per tonne because of short selling. SMM expects SHFE 1706 aluminium will move at RMB 14,000-14,200 per tonne, testing support at RMB 14,000 per tonne (US$2030.34).

Spot aluminium in China's domestic market is projected to trade at discounts of RMB 140-100 per tonne over SHFE 1705 aluminium on Tuesday, May 2.

The macroeconomic data calendar on Friday features the release of Caixin’s China manufacturing PMI for April; Markit’s manufacturing PMI for Italy, France, Germany and the euro zone in April, and the euro zone’s jobless rate in March.