LME aluminium price edged lower at US$1433.5/t; SHFE aluminium price jumped to US$1831/t

The US dollar hit a three-week high on Thursday before giving back much of those gains, as investors continued to digest Federal Reserve Chairman Jerome Powell’s dismissal of speculation over US interest rates entering negative territory and his glum forecast for the economy.

Three-month LME aluminium remained range-bound on Thursday, slipping from an intraday high of US$1,482 per tonne to a new five-week low of US$ 1,467.5 per tonne before rebounding to close flat at US$ 1,476 per tonne. Lingering concerns over the economic fallout from the COVID-19 and fears of a re-ignition of the US-China trade conflicts hamper upside potential in LME aluminium, which is expected to move to US$ 1,460-1,500 per tonne today.

As of Thursday, May 14, LME aluminium cash (bid) price and LME official settlement price declined from US$ 1439 per tonne to US$ 1433.50 per tonne. 3-months bid price and 3-months offer price also decreased from US$ 1476.50 per tonne to US$ 1469 per tonne. Dec 21 bid price and Dec 21 offer price hovered at US$ 1597.50 per tonne compared to US$ 1604.50 per tonne on May 13.

LME aluminium 3-months Asian Reference Price hovered at US$ 1480 per tonne, up from US$ 1478.84 per tonne.

SHFE Aluminium Price Trend

Benchmark aluminium price for SHFE, on Friday, May 15, jumped to US$ 1831 per tonne from US$ 1803 per tonne on May 14.

The most-liquid SHFE July contract showed signs of breaking up the 60-day moving average above as it moved to a session high of RMB 12,575 per tonne before ending up 1.05 per cent higher on the day at RMB 12,530 per tonne. SMM data showed that domestic social inventories of primary aluminium and aluminium billet continued to fall sharply this week, pointing to stable consumption. The price difference between the May and June contracts will be monitored as the May contract will finish its last trading day Friday. 

The most active SHFE July contract rose slightly in overnight trading by gaining 0.4 per cent to end at RMB 12,535 per tonne. A potential supply increase on the back of the opening of the import arbitrage window keeps backwardation on SHFE aluminium firm. The July contract is expected to move at RMB 12,300-12,600 per tonne today.