LME aluminium rises but may retrace to US$1,890/t, SHFE aluminium to move at highs

LME aluminium finally broke the downtrend it was tracing of late by closing at US$1,899.50 per tonne on Monday, May 15. The light metal traded globally rose further by 0.8 per cent to close at US$1,915 per tonne on Tuesday, May 16.  Reuters’ technical analysis suggested that LME aluminium may retrace to US$1,890 per tonne on failing to break a resistance at US$1,908 per tonne.  However, Shanghai Metals Market says that the contract will hover in the range of US$1,910-1,930 per tonne on Wednesday, May 17.

As on May 16, LME official cash buyer price of aluminium stands at US$1,914 per tonne, cash seller & settlement price is US$1,915 per tonne, 3M buyer price is US$1,912 per tonne, 3M seller price is US$1,912.50 per tonne, Dec1 buyer price is US$1,943 per tonne, and Dec1 seller price is US$1,948 per tonne. The current LME official Opening Stock of aluminium is estimated at 1536275 tonnes, total Live Warrants is 967850 tonnes, and Cancelled Warrant is 568425 tonnes.

LME aluminium premiums, as on May 12, remain unchanged across major regions. LME Aluminium East-Asia Premium stands at US$110, LME Aluminium US Premium is US$215, LME Aluminium West-Europe Premium is US$95, and LME Aluminium South-East Asia Premium remains unchanged at US$15 (per tonne).

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The benchmark aluminium price at Shanghai Metal Exchange (SME) has inched higher to US$2,014 per tonne on Wednesday, May 17, from US$2,013 per tonne on Tuesday.

The most actively traded aluminium futures contract SHFE 1707 aluminium fell sharply at Shanghai Futures Exchange (SHFE) to RMB 13,890 per tonne due to short selling after opening at RMB 14,030 per tonne on Tuesday, May 16. Later the trading volumes improved as positions were up 7,464 lots to 262,936 lots. SMM forecasts that SHFE 1707 aluminium will move at fairly high range of RMB 13,910-14,100 per tonne on Wednesday, May 17.

Spot aluminium in China market is expected to trade at discounts of RMB 90-50 per tonne over SHFE 1706 aluminium contract on Wednesday, May 17, SMM said.

The market will eye US crude oil inventories from last week, as there is no solid macroeconomic data release scheduled for today.