LME aluminium market seems volatile due to heavy stock accumulation; SHFE shrinks by US$12/t

LME aluminium opened at US$2,239 per tonne last Friday, with high and low at US$2,245 per tonne and US$2,206 per tonne, respectively, before closing at US$2,215.5 per tonne, a drop of US$19.5 per tonne or 0.87 per cent.

The London Metal Exchange price chart, on January 12, registered a downward trend in aluminium prices, with the LME aluminium cash bid price stopping at US$2,174 per tonne and the LME aluminium official settlement price closing at US$2,175 per tonne, with a loss of US$28.50 per tonne or 1.29 per cent and US$28 per tonne or 1.27 per cent.

Prevailing London Metal Market and Global Trade Conditions 

Aluminium prices are dropping owing to the heightened stock accumulation in the LME warehouses. Moreover, a majority of these stocks have Russian origin. On the other hand, the falling US dollar price is also a fundamental cause behind the LME and SHFE aluminium price fall. If the European construction sector remains at an all-time low, as it is now, the prospect of an overall aluminium price hike is quite ominous.

The 3-month bid price and the 3-month offer price have both descended by US$21.50 per tonne or 0.96 per cent to peg at US$2,222.50 per tonne and US$2,223.50 per tonne, respectively.

The 25 December bid price and the 25 December offer price have dropped US$20 per tonne or 0.8 per cent, stopping at US$2,480 per tonne and US$2,485 per tonne.

The LME opening stock has subtracted 2,000 tonnes or 0.36 per cent to a halt at 558,575 tonnes. Live warrants remained stoic at 354,575 tonnes, whereas cancelled warrants shrank by 2,000 tonnes or 0.97 per cent to close at 204,000 tonnes.

The 3-month Asian Reference price has dropped US$9.27 per tonne or 0.41 per cent, officially closing at US$2,238.98 per tonne.

SHFE aluminium price 

Today, on January 15, the SHFE aluminium price has clipped US$12 per tonne or 0.45 per cent to settle at US$2,657 per tonne.

Overnight, the most-traded SHFE 2403 aluminium contract opened at RMB 19,000 per tonne, with high and low at RMB 19,030 per tonne and RMB 18,960 per tonne before closing at RMB 18,980 per tonne, down RMB 25 per tonne or 0.13 per cent. 

SHFE 2307 aluminium added RMB 595 per tonne or 3.38 per cent to RMB 18,185 per tonne. The open interest fell 11,785 lots to 256,640 lots.