
The US dollar weakened against major peers on Thursday amid weakening economic data and heightened market volatility. Most LME and SHFE base metals ended in negative territory overnight. LME aluminium dropped 1.6%. SHFE aluminium slipped close to 0.9%.
LME aluminium dropped further from last closing to close at US$ 1945 per tonne on Thursday December 6. After a negative open, LME aluminium extended its decline on Thursday and closed at US$1,941 per tonne at night. This forced it to relinquish most gains it had made since last Friday. We expect it to remain weak today with a trading range of US$1,920-1,960 per tonne.
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As on December 6, Thursday, LME aluminium cash (bid) price stood at US$ 1943 per tonne, LME official settlement price stands at US$ 1945 per tonne; 3-months bid price stands at US$ 1941 per tonne, 3-months offer price is US$ 1941.50per tonne; Dec 19 bid price stands at US$ 1995 per tonne, and Dec 19 offer price stands at US$ 2000 per tonne.
The LME aluminium opening stock dropped to 1043775 tonnes. Live Warrants totalled at 793200 tonnes, and Cancelled Warrants were 250575 tonnes.
LME aluminium 3-months Asian Reference Price is hovering at US$ 1955 per tonne.
SME and SHFE Aluminium Price Trend
The benchmark aluminium price on Shanghai Metal Exchange dropped to US$ 1965 per tonne today from US$ 1971 per tonne on December 6.
The SHFE 1901 contract dipped below the daily moving average after opening, and lost nearly all the gains since last Monday to settle at an intraday low of RMB 13,590 per tonne yesterday. As Huawei CFO’s arrest in Canada hampered market sentiment, the SHFE 1901 contract posted a lower open overnight and lost over RMB 100 per tonne in five minutes. It then traded rangebound to finish overnight session at RMB 13,545 per tonne, posting a three-day losing streak. We expect it to trade weakly in a range of RMB 13,450-13,600 per tonne today with spot discounts at RMB 50-10 per tonne.
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