LME aluminium plunges below US$1,900/t, China market sentiment remains bearish

As anticipated by market watchers, LME aluminium fell below US$1,900 per tonne level unable to draw support from a weak US dollar index and strengthening crude oil prices. The light metal traded globally closed at US$1,888 per tonne on Monday, June 12, down 0.7 per cent from its previous close of US$1,901.50 per tonne on June 9.

Reuters in its latest aluminium price analysis observed that the metal is still "the star of the London Metal Exchange (LME) base metals complex, up by over 12 percent on the start of the year." It has been taking a different set of cues from China, pinning its hopes on Beijing’s supply-side reforms; but the recent price trend suggests that LME aluminium will continue to struggle around US$1,900 per tonne, at least, in the short term.

As on June 12, LME official cash buyer aluminium price stands at US$1,887 per tonne, cash seller & settlement aluminium price is US$1,888 per tonne, 3M buyer price is US$1,892 per tonne, 3M seller price is US$1,892.50 per tonne, Dec1 buyer price is US$1,923 per tonne, and Dec1 seller price is US$1,928 per tonne. The current LME official Opening Stock of aluminium is estimated at 1450675 tonnes, total Live Warrants is 1031650 tonnes, and Cancelled Warrant is 419025 tonnes.

LME aluminium premiums, as on June 9, remain fairly unchanged at their last recorded levels. LME Aluminium East-Asia Premium stands at US$110, LME Aluminium South-East Asia Premium remains unchanged at US$15, LME Aluminium US Premium has dropped to US$200, and LME Aluminium West-Europe Premium is down at US$85 (per tonne).

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The benchmark aluminium price at Shanghai Metal Exchange (SME) stands at US$1,998 per tonne on Tuesday, June 13, down from US$2,003 per tonne on Monday, June 12. 

At Shanghai Futures Exchange (SHFE), the most active aluminium future contract SHFE 1708 aluminium is predicted to move in the range of RMB 13,620-13,770 per tonne on Tuesday, June 13, with resistance at the ten-day moving average. SMM says the market sentiment in China commodity market is still bearish.

Spot aluminium in east China market is expected to trade at discounts of RMB 20-60 per tonne over SHFE 1706 aluminium contract on Tuesday, June 13, SMM said.

The market focus will be on the US May PPI, UK May CPI, as well as June ZEW economic climate index in Germany and the euro zone on Tuesday, June 13, SMM said.