LME continues upward trend supported by higher alumina cost; SHFE follows trend

The US dollar rose to the highest since May 3, at 97.88, as better-than-expected US data boosted investors’ risk appetite, even as the US and China remained locked in a trade dispute.  LME base metals advanced for the most part and aluminium gained 0.19%. SHFE aluminium ended 0.24% higher. 

Lower inventories and rising prices of alumina on supply cuts continued to buoy prices of aluminium. LME aluminium gained 0.19% to settle at US$1,855 per tonne. LME aluminium is likely to trade at US$1,850-1,870 per tonne today. 

As on May 16, LME aluminium cash (bid) price stood at US$ 1830 per tonne, LME official settlement price stands at US$ 1832 per tonne; 3-months bid price stands at US$ 1861 per tonne, 3-months offer price is US$ 1862 per tonne; Dec 20 bid price stands at US$ 1873 per tonne, and Dec 20 offer price stands at US$ 1978 per tonne. 

The LME aluminium opening stock dropped to 1244850 tonnes. Live Warrants totalled at 802675 tonnes, and Cancelled Warrants were 442175 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1857 per tonne.

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange has increased substantially to US$ 2083 per tonne today from US$ 2088 per tonne on Thursday May 16.

The most active SHFE July contract traded rangebound at highs during the day, holding onto overnight gains to close 0.35% higher at RMB 14,335 per tonne. Recent strong performance in SHFE aluminium was in part bolstered by rising prices of alumina. SMM data showed that social inventories of primary aluminium in China continued to fall this week, down 63,000 tonnes from a week ago, pointing to robust demand. Longs then pulled the SHFE July contract to a high of RMB14,420 per tonne, before it finished at RMB 14,385 per tonne. It is likely to trade at RMB 14,300-14,400 per tonne today.