10 JANUARY 2014www.commodityonline.com
MCX Aluminium falls, market under long-liquidation
Edited by : AL CIRCLE
2 min read
The rise in premiums highlights the London Metal Exchange's (LME) limited ability to cool a market where low interest rates continue to whet appetites for locking up aluminium as a form of investment.
January 08, 2014 12:19
MUMBAI: Aluminium settled down -0.32% at 109.30 despite that Aluminium premiums, or costs to get metal out of storage, have soared to all-time highs in the United States with Europe and Asia close behind as smelters shut and spare metal is snatched up by traders for collateral in financing deals.
The rise in premiums highlights the London Metal Exchange's (LME) limited ability to cool a market where low interest rates continue to whet appetites for locking up aluminium as a form of investment. The LME, the world's largest metals marketplace, announced big changes to its metals storage system in November after years of complaints about wait times of more than a year and large premiums to withdraw metal from the warehouses it monitors.
It outlined plans to slash waiting times to a maximum of 50 days, among other measures, which analysts and manufacturers had hoped would lead to lower premiums especially given that the aluminium market is oversupplied. But the benchmark Platts U.S. Midwest aluminium premium jumped by three U.S. cents per pound to 15 U.S. cents per pound of metal over the LME cash price late last week, the pricing agency said. While from US side the US Senate confirmed Janet Yellen as the new Chief of fED, but the news exerted limited influence on the market as the result matched expectation. What really boosted the market was a 13% drop in the US trade deficit during November to USD 34.3 billion, its lowest since October 2009. The US exports, primarily driven by industrial supply, means of production, and automobile exports, hit an all-time high in November. Technically market is under long liquidation and getting support at 108.9 and below same could see a test of 108.4 level, And resistance is now likely to be seen at 109.8, a move above could see prices testing 110.2.
MUMBAI: Aluminium settled down -0.32% at 109.30 despite that Aluminium premiums, or costs to get metal out of storage, have soared to all-time highs in the United States with Europe and Asia close behind as smelters shut and spare metal is snatched up by traders for collateral in financing deals.
The rise in premiums highlights the London Metal Exchange's (LME) limited ability to cool a market where low interest rates continue to whet appetites for locking up aluminium as a form of investment. The LME, the world's largest metals marketplace, announced big changes to its metals storage system in November after years of complaints about wait times of more than a year and large premiums to withdraw metal from the warehouses it monitors.
It outlined plans to slash waiting times to a maximum of 50 days, among other measures, which analysts and manufacturers had hoped would lead to lower premiums especially given that the aluminium market is oversupplied. But the benchmark Platts U.S. Midwest aluminium premium jumped by three U.S. cents per pound to 15 U.S. cents per pound of metal over the LME cash price late last week, the pricing agency said. While from US side the US Senate confirmed Janet Yellen as the new Chief of fED, but the news exerted limited influence on the market as the result matched expectation. What really boosted the market was a 13% drop in the US trade deficit during November to USD 34.3 billion, its lowest since October 2009. The US exports, primarily driven by industrial supply, means of production, and automobile exports, hit an all-time high in November. Technically market is under long liquidation and getting support at 108.9 and below same could see a test of 108.4 level, And resistance is now likely to be seen at 109.8, a move above could see prices testing 110.2.
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