LME aluminium recovers some losses on Monday; both LME and SHFE expected to trade weakly today

The dollar edged higher against the euro on Monday. The dollar added to recent gains against other major currencies, supported by robust US consumer spending data on Monday. Both LME and SHFE base metals ended in negative territory across the board overnight.

LME aluminium closed Monday’s trading at US$ 1980.50 per tonne, higher from Friday’s closing price of US$ 1961 per tonne. Then the contract ended near its day-lows of US$1,978 per tonne overnight. It is likely to remain weak today with a trading range of US$1,980-2,010 per tonne.

As on October 29, Monday, LME aluminium cash (bid) price stood at US$ 1980 per tonne, LME official settlement price stands at US$ 1980.50 per tonne; 3-months bid price stands at US$ 2000 per tonne, 3-months offer price is US$ 2000.50 per tonne; Dec 19 bid price stands at US$ 2053 per tonne, and Dec 19 offer price stands at US$ 2058 per tonne. 

The LME aluminium opening stock dropped to 1048625 tonnes. Live Warrants totalled at 723950 tonnes, and Cancelled Warrants were 324675 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1996 per tonne.

SME and SHFE Aluminium Price Trend 

The benchmark aluminium price on Shanghai Metal Exchange dropped to US$ 2015 per tonne today from US$ 2032 per tonne on October 29.

On Monday, the SHFE 1812 contract came off from a high of RMB 14,265 per tonne after surging longs increased open interests by some 4,000 lots right after opening. It closed at RMB 14,190 per tonne after it dipped to a low of RMB 14,155 per tonne. The contract then reversed its direction after hitting a high of  RMB14,200 per tonne overnight. It then slid to close near its session-lows at RMB 14,125 per tonne. Declines in Chinese shares hampered sentiment across the futures markets. The contract is likely to trade at  RMB14,050-14,200 per tonne today with spot discounts at RMB 70-30 per tonne.

Winter cuts across the nonferrous sector in Henan and Shandong provinces missed expectations, and this grew market pessimism. The contract may continue to test resistance at the five- and 10-day moving averages.