The US dollar index closed at 95.075 on Wednesday after it fell to 94.93, the lowest since August 2. LME base metals, except for copper, rose across the board on Wednesday. LME aluminium traded strongly rangebound and closed at US$2,065 per tonne on Wednesday night after closing the day’s trading at US$2038.50 per tonne. We expect it to trade at US$2,060-2,080 per tonne today.
As on August 22, LME aluminium cash (bid) price stands at US$ 2038 per tonne, LME official settlement price stands at US$ 2038.50 per tonne; 3-months bid price stands at US$ 2063 per tonne, 3-months offer price is US$ 2063.50 per tonne; Dec 19 bid price stands at US$ 2105 per tonne, and Dec 19 offer price stands at US$ 2110 per tonne.
The LME aluminium opening stock dropped to 1102450 tonnes. Live Warrants totalled at 831325 tonnes, and Cancelled Warrants were 271125 tonne.
LME aluminium 3-months Asian Reference Price is hovering at US$ 2064.45 per tonne.
SME and SHFE Aluminium Price Trend
The benchmark aluminium price on Shanghai Metal Exchange dropped to US$ 2119 per tonne on August 23, from US$ 2132 per tonne on August 22.
With support from the five-day moving average, the SHFE 1810 contract regained some losses yesterday after it fell to RMB 14,610 per tonne at one point. It finally closed at RMB 14,655 per tonne. As investors added their long positions before closing, the SHFE 1810 contract reversed most of its early losses and ended overnight 0.27% lower at RMB 14,670 per tonne. We expect it to trade at RMB 14,600-14,800 per tonne today with spot discounts at RMB 70-30 per tonne.
The market will take cues from developments of US-Sino trade negotiations and US sanctions on Russian aluminium. The Fed meeting minutes for August also showed that central bank officials are concerned that the ongoing trade war will pose the biggest threat to an otherwise "strong" economy. This factor is going to have an impact on the market in the short term.
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