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19 OCTOBER 2015 AL CIRCLE

LME aluminium vulnerable to losses this week

1MINS READ
LME aluminium will be vulnerable to losses this week on negative news from China, SMM says.

Bearish sentiment is strong in China. The US dollar index found strong support near 94. LME aluminium has lost support at all moving averages. All these factors will push LME aluminium down below $1,550 per million tonne.

SHFE 1512 aluminium will range 11,000-11,200 yuan per tonne, dragged by lower production costs. Spot discounts in China will widen to 100 yuan per tonne due to high inventories.

According to the analysts, LME aluminium may break a support at $1,563 per tonne. It fall to the next support at $1,552, as indicated by a Fibonacci projection analysis. The support is provided by the 14.6 percent Fibonacci projection level of an upward wave C, the third wave of a three-wave cycle from the Aug. 24 low of $1,506.

The fall from the October 9 high of $1,646 consists of three small waves. The current wave is expected to travel a similar distance as the first wave labelled a, to arrive at $1,541.50. A break above $1,577, the 23.6 percent level, will open the way towards $1,599, the 38.2 percent level.

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Aluminium LME SMM Price

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