US sanction lifts LME aluminium above US$2000 per tonne; SHFE aluminium follows the uptrend

US sanctions on Rusal has lifted the LME aluminium price, creating metal supply insecurities among traders and investors. LME aluminium contract rallied two per cent on Monday’s trading and finally closed at US$2,113-per tonne on April 9 from US$1967 on Friday, April 6. Shanghai Metals Market expects LME aluminium to stay range bound between the 40- and 60-day moving averages with a trading range at $2,110-2,150 per tonne considering the panic buying by traders encouraged by the US sanctions.

As on April 9, LME aluminium cash (bid) price stands at US$ 2113 per tonne, LME official settlement price stands at US$ 2114 per tonne; 3-months bid price stands at US$ 2121 per tonne, 3-months offer price is US$ 2128 per tonne; Dec 19 bid price stands at US$ 2155 per tonne, and Dec 19 offer price stands at US$ 2160 per tonne. 

The LME aluminium opening stock has dropped to 1254125 tonnes. Live Warrants totalled at 996875 tonnes, and Cancelled Warrants were 257250 tonne.

LME aluminium 3-months ABR price is hovering low at US$ 2105.45 per tonne. 

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange slightly increased from US$ 2235 per tonne on April 9 to US$ 2254 per tonne on April 10.

Buoyed by the growth of LME aluminium during the Qingming holiday, SHFE aluminium also climbed up to reach a high of RMB 14,375 per tonne today. As ferrous metals gained, the contract recovered after dipping to a low of RMB 14,140 per tonne in the afternoon. If China’s domestic inventory continues to drop, SMM expects the prices to stay in an upward trend with the support of firm LME aluminium prices.  But China’s aluminium still faces strong pressure from fundamentals in the medium term. SMM expects SHFE aluminium to trade at RMB 14,280-14,480 per tonne today, with spot discounts ranging within RMB 80-40 per tonne.US