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16 AUGUST 2018 AL CIRCLE

Surging US Dollar brings down both LME and SHFE aluminium to record low since April; bearish sentiment likely to continue

EDITED BY : BEETHIKA BISWAS 2MINS READ

The US dollar index closed at 96.71 overnight after rising to over 96.98 earlier, the highest since June 2017 as investors added their holdings of the greenback on worries over slowing Chinese growth and Europe's exposure to Turkey. The Chinese yuan fell past 6.95 per dollar in overnight offshore trading.

LME aluminium continued downward trend and closed the day’s trading at US$ 1994.5 per tonne, the level last seen in April 2018, before the sanctions against Rusal. After that it recovered slightly and touched a three-week low at US$2,007 per tonne and closed at US$2,022 per tonne at Wednesday night. The contract is likely to trade at US$2,000-2,040 per tonne today amid bearish sentiment.

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As on August 15, LME aluminium cash (bid) price stands at US$ 1993.50 per tonne, LME official settlement price stands at US$ 1994.50 per tonne; 3-months bid price stands at US$ 2022 per tonne, 3-months offer price is US$ 2023 per tonne; Dec 19 bid price stands at US$ 2067 per tonne, and Dec 19 offer price stands at US$ 2072 per tonne. 

The LME aluminium opening stock dropped to 1131275 tonnes. Live Warrants totalled at 844125 tonnes, and Cancelled Warrants were 287150 tonne.

LME aluminium 3-months Asian Reference Price is hovering at US$ 2043.44 per tonne.

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange dropped to US$ 2078 per tonne on August 15, from US$ 2097 per tonne on August 14.

As longs exited with pressure from the macroeconomic developments, the SHFE 1810 contract fell to a low of RMB 14,535 per tonne near closing yesterday. It closed between the five- and ten-day moving averages. The SHFE 1808 contract finally settled at 14,470 per tonne in the evening. The US dollar continued to grow as the euro, Indian rupee, and Russian rouble depreciated.  The contract then opened lower overnight and fell to RMB 14,230 per tonne, its lowest in close to one month. With some support below, the contract then clawed back some losses and closed at RMB 14,290 tonne. SMM expects it to trade at RMB 14,180-14,380 per tonne today with spot discounts at RMB 90-50 per tonne.

Tagged with:

Price LME China

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EDITED BY : BEETHIKA BISWAS 2MINS READ

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