
LME aluminium is all set to enter another volatile phase this week. The contract, after having recovered from the initial aftershocks of the US Presidential election last week, was traded at US$1,777/mt on Friday, November 11. The market was primarily dominated by capital. Shanghai Metals Exchange analysts say market players will get to see a different movement of LME aluminium during Asian and European trading hours. The lightmetal will swing between US$1,735-1,760/mt on Monday. So, investors should remain on the sidelines today, SMM puts up a caveat.
Eight Fed committee members will reportedly speak today. Fed vice-chairman said last Friday a rate hike is nearing. The market expects the Fed to increase interest rate in December, driving up the US dollar index to 99.
LME official opening stocks of aluminium currently stands at 2105350 tonnes. Total Live warrants is estimated at 1343275 tonnes and cancelled warrants stand at 762075 tonnes.
As per the latest LME data, Dec 1 Seller price of aluminium is US$1803/mt.
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In China, aluminium traded on Shanghai Metal Exchange opened at US$ 2,245/mt on Monday, November 14.
On Shanghai Futures Exchange, SHFE 1701 aluminium dived last Friday, waning bullish sentiment. SMM says the commodity will range between RMB 13,700-14,000/mt on Monday with longs taking profit at highs. Base metal prices on the SHFE are expected to swing in a wide range this week, SMM foresees and price gap between SHFE 1701 aluminium and SHFE 1612 aluminium will widen to above RMB 1,000/mt.
“A series of macro economy data is going to be released this week, and Shanghai metal prices are expected to be volatile after a crazy week,” SMM says.
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Chinese commodity market fluctuated wildly last Friday evening as a result of continuous intervention by supervision department, including margin hike, transaction fees and customer information recording. The aftermath is expected to affect the market further this week. Spot aluminium should trade at discount of RMB 20/mt to premiums of RMB 20/mt on Monday, SMM predicts.
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