
The US dollar index saw its largest daily percentage drop in six weeks on Thursday after the Federal Reserve signalled fewer interest rate hikes over the next two years. LME base metals traded mixed on Thursday and SHFE base metals ended in the black across the board overnight. LME Aluminium rose 0.4% and SHFE aluminium inched up 0.2%.
The LME aluminium contract closed Thursday’s trading at US$ 1923.50 per tonne, lower than last closing after the contract lost momentum on the news of lifting of sanctions on Rusal. As the US dollar index fell below 97, LME aluminium traded higher on Thursday night, but ended at US$1,915.5 per tonne. With weakness in the dollar, LME aluminium is likely to rebound slightly and trade at US$1,915-1,930 per tonne today.
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As on December 20, Thursday, LME aluminium cash (bid) price stood at US$ 1922.50 per tonne, LME official settlement price stands at US$ 1923.50 per tonne; 3-months bid price stands at US$ 1923 per tonne, 3-months offer price is US$ 1923.50 per tonne; Dec 19 bid price stands at US$ 1978 per tonne, and Dec 19 offer price stands at US$ 1983 per tonne.
The LME aluminium opening stock dropped to 1254125 tonnes. Live Warrants totalled at 1052350tonnes, and Cancelled Warrants were 201775 tonnes.
LME aluminium 3-months Asian Reference Price is hovering at US$ 1917 per tonne.
SME and SHFE Aluminium Price Trend
The benchmark aluminium price on Shanghai Metal Exchange increased to US$ 1970 per tonne today from US$ 1957 per tonne on December 20.
Expectations of supportive policies to be issued at the central economic working conference buoyed market sentiment, and this pulled the SHFE 1902 contract from a low of RMB 13,605 per tonne at noon yesterday. The contract rebounded above the daily moving average ending at RMB 13,690 per tonne. After a higher open, the SHFE 1902 contract hovered between the five- and 20-day moving averages overnight and ended at RMB 13,680 per tonne. The contract is expected to trade at RMB 13,600-13,700 per tonne today with spot discounts at RMB 90-50 per tonne.
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