LME aluminium uptrend intact; Shanghai aluminium to trade closely with the dollar

LME aluminium advanced on Thursday closing at US$1,839 per tonne after night trading even though dollar firmed up against the Japanese yen. The rise registered was 0.98 per cent from the previous day's closing of US$1,821 per tonne. Shanghai Metals Market (SMM) forecast says the contract will trade closely with the dollar and range between US$1,845-1,865 per tonne on Friday, February 10.

As on February 8, LME official cash buyer price of aluminium stands at US$1,820.5 per tonne, cash seller & settlement price is US$1,821 per tonne, 3M buyer price is US$1,840 per tonne, 3M seller price is US$1,840.5 per tonne, Dec1 buyer price is US$1,895 per tonne, and Dec1 seller price is US$1,900 per tonne. The current LME official Opening Stock of aluminium is estimated at 2254650 tonnes, total Live Warrants is 1655750 tonnes, and Cancelled Warrant is 589650 tonnes.

LME Aluminium US Premium, as on February 7, stands at US$205, LME Aluminium West-Europe Premium is recorded at US$80, LME Aluminium East-Asia Premium remains unchanged at US$90, and LME Aluminium South-East Asia Premium is US$15.


In China, the benchmark price of aluminium on Shanghai Metal Exchange (SME) has come down at US$1,963 per tonne on Friday, registering a marginal decline of 0.85 per cent from the Thursday's price of US$1,980 per tonne.

Aluminium traded on Shanghai Futures Exchange- SHFE 1703 aluminum opened at RMB 13,820 per tonne on Thursday. In the latter half of the day, the contract fluctuated and dived lower at RMB 13,735 per tonne. During night trading, it met resistance at RMB 13,925 per tonne. SMM says, SHFE 1703 aluminum will remain range-bound in the near term and move at RMB 13,800-13,950/mt on Friday.

Spot aluminium in China's domestic market is expected to trade at discounts of RMB 160-120 per tonne on Friday.   

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SMM surveyed major aluminium producers in China and released last month's production data. The table below shows January 2017 total aluminium output volume:

Market participants will be keeping an eye out for the upcoming meeting between President Donald Trump and Japan’s Prime Minister Shinzo Abe, on Friday. The outcome of the meeting is expected to impact on the U.S. dollar.

"The upcoming 2-day meeting between Trump and Abe will be closely watched, which will affect the dollar market, and Shanghai metals are expected to diverge, with eyes on the dollar movement,” SMM says.