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17 AUGUST 2018 AL CIRCLE

Spot aluminium market in east China sees active trading on price drop; billet inventories record a rise again

EDITED BY : DEBANJALI SENGUPTA 2MINS READ

Spot aluminium trading in east China spurred a bit on Thursday, August 16, than the previous day as drops in SHFE aluminium prices generated some purchases from downstream consumers, found Shanghai Metals Market.

The SHFE September contract traded range-bound at RMB 14380 per tonne to RMB 14390 per tonne in the morning after it fell overnight. In Shanghai and Wuxi, most transactions were seen at RMB 14330 per tonne RMB 14350 per tonne, while in Hangzhou, trading activities were heard at RMB 14340 per tonne to RMB 14350 per tonne. Transactions in Linyi and Gongyi, on the other hand, were heard at RMB 14300 per tonne with discounts of RMB 50-30 per tonne and at RMB 14370 per tonne with discounts of RMB 70 per tonne, respectively.

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SMM believes the recent movement of the US dollar could be a major factor directing the market and weighing on aluminium prices in the short term.

As of today, August 17, A00 aluminium ingot spot price stands at RMB 14360 per tonne after rising a bit from RMB 14330 per tonne, as on August 16, 2018. The average prices are expected to range between RMB 14340 per tonne and RMB 14380 per tonne, with spot discounts to settle at RMB 70 to RMB 30 per tonne.

SMM forecasts the aluminium prices to stay bullish after September and expects the most traded SHFE contract to climb to RMB 15000 per tonne in the fourth quarter due to rising costs on anticipated winter production cut.

The Guangdong market also saw brisk trading on Thursday with most transactions at RMB 14,440 per tonne to RMB 14,460 per tonne. Premiums against the September contract were at RMB 70 to 80 per tonne.

According to another update by SMM, aluminium billet inventories rose on August 16 across all the major Chinese consumption areas to stand at 91,900 tonnes. This marked a week-on-week increase by 9,100 tonnes.

For more details, refer the chart below.


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EDITED BY : DEBANJALI SENGUPTA 2MINS READ

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