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04 SEPTEMBER 2017 AL CIRCLE

LME aluminium unchanged, but to continue uptrend on China capacity cuts

EDITED BY : DIPANWITA GUPTA 2MINS READ

LME aluminium remained buoyed up, unchanged for two consecutive days ahead of the weekend. The light metal contract closed at US$2,113.50 per tonne on Friday, September 1, showing a clear uptrend through its day’s performance. Shanghai Metals Market (SMM) suggests that LME aluminium will continue to rise further to US$2,130-2,155 per tonne on Monday, September 4, as China is mulling intensifying its aluminium smelter capacity cuts and environmental checks.

The green metal hit the highest last Friday (since February 2013) due to bullish trends in other base metals and a drop in the US dollar index. According to SMM, the upward momentum will extend over the short term.

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As on September 1, LME official bid price of aluminium stands at US$2,113 per tonne, offer price is US$2,113.50 per tonne, 3M bid price is US$2,133 per tonne, 3M offer price is US$2,134 per tonne, Dec3 bid price is US$2,245 per tonne, and Dec3 offer price is US$2,250 per tonne. The current LME official Opening Stock of aluminium is estimated at 1323550 tonnes, total Live Warrants is 1147375 tonnes, and Cancelled Warrant is 176175 tonnes.

SME and SHFE Aluminium Price Trend 

The benchmark aluminium price at Shanghai Metal Exchange (SME) has edged higher from US$2,446 per tonne on Friday, September 1, to US$2,506 per tonne on September 4, Monday.

Aluminium future contracts on Shanghai Futures Exchange traded widely on Friday. The following table from SMM shows active aluminium contracts movement in a snapshot:

SMM thinks that SHFE 1711 aluminium will rise further and range at RMB 16,700-17,000 per tonne on Monday, September 4.

Spot discounts in east China spot aluminium market are expected to range at RMB 260-220 per tonne over SHFE 1709 aluminium.

The market focus will be on the US dollar index movement and Euro zone’s September Sentix investor confidence index on Monday, September 4, SMM said. Today being US labour holiday trading activity will remain muted.


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EDITED BY : DIPANWITA GUPTA 2MINS READ

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