LME traded bullish last week and closed at US$1,801/t on Friday night; SHFE to trade between RMB 14,170-14,250/t

The US dollar recorded its best week since early November on the back of a series of strong US economic data that reduced the likelihood of a near-term cut in interest rates. The dollar index, which tracks the greenback against a basket of other currencies, rose 0.3% on the day and finished at 97.68 last Friday. LME base metals and the SHFE complex increased for the most part. LME aluminium gained 0.06% and SHFE aluminium gained 0.39%.

Three-month LME aluminium pulled back after rising to a high of US$1,805 per tonne, and closed slightly higher on the day at US$1,801 per tonne.

As on December 20, Friday, LME aluminium cash (bid) price stood at US$ 1770 per tonne, LME official settlement price stands at US$ 1770.50 per tonne; 3-months bid price stands at US$ 1801 per tonne, 3-months offer price is US$ 1803 per tonne; Dec 20 bid price stands at US$ 1858 per tonne, and Dec 20 offer price stands at US$ 1863 per tonne.

The LME aluminium opening stock increased again to 1486550 tonnes. Live Warrants totalled at 1305150 tonnes, and Cancelled Warrants were 181400 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1797 per tonne.

SHFE Aluminium Price Trend

Benchmark aluminium price for SHFE (Shanghai Future Exchange) dropped to US$ 2040 per tonne on Monday, December 23, 2019.

The most traded SHFE 2002 contract eased during the daytime session, paring overnight gains to close 0.14% higher at RMB 14,175 per tonne, as longs took profits after the prices climbed to highs in more than three months. The SHFE 2002 contract hovered in a narrow range with a high of RMB 14,260 per tonne, before ending up 0.53% at RMB 14,250 per tonne. Expectations of further decline in social inventories of primary aluminium on the back of healthy demand will sustain a backwardation structure. Today, the SHFE contract is likely to trade between RMB 14,170-14,250 per tonne, with LME aluminium between US$1,780-1,810 per tonne. Low stocks and tight spot availability are expected to limit downside in SHFE aluminium.