SHFE aluminium traded higher on resumption of downstream demand; LME remained closed on Monday
The US dollar edged lower against a basket of currencies in poor trades on Monday. The LME was closed for Easter Monday holiday. SHFE aluminium traded higher. The benchmark aluminium price on Shanghai Metal Exchange increased to US$ 2113 per tonne today from US$ 2105 per tonne on April 22. The following graph shows the SME price growth in last one month:
Longs bolstered the most-liquid SHFE June contract yesterday. It extended the increase in the afternoon to a high of RMB 14,200 per tonne and closed at RMB 14,190 per tonne. The SHFE June contract then pared some earlier gains to end 0.28% higher at RMB 14,175 per tonne overnight, and buck the downtrend across the nonferrous complex. SHFE aluminium is expected to remain firm today with a trading range of RMB 14,150-14,250 per tonne. Spot prices are seen at a discount of RMB 30 per tonne to a premium of RMB 10 per tonne. Robust SHFE aluminium is likely to bolster its LME counterpart today, which is expected to trade between US$1,850-1,880 per tonne.
Late resumption of downstream demand in Guangdong lowered social inventories of primary aluminium. This, coupled with a rebound in prices of alumina, is expected to keep the contract robust in the short term.
Global aluminium production may grow 6% and consumption 4% in 2019, projects Dr. T.K. Chand
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