LME Aluminium edges higher but China aluminium dips amid cautious trading

As the U.S. Federal Reserve readies to end the year with Interest Rate Hike to be decided in today's policy meeting, markets take guard with wary sentiment. Crude oil prices, on the other hand, have jumped by 4.82%, sitting at US$56.95/bbl. The price rally in the benchmark oil prices got reflected in LME aluminium prices which were up 0.2% at US$1,755/mt on December 13, in a mixed day.

However, the market as of now is cautious ahead of the announcement of Fed’s interest rate decision, and Shanghai Metals Market analysts say base metals including aluminium will move weakly in the short term. The contract will test support at the 5 and 20-day moving averages and will move at US$1,730-1,750/mt on Wednesday.

As on December 12, CASH Buyer price of aluminium stands at US$1749/mt, CASH Seller & Settlement price of aluminium is US$1749.50/mt, 3M Buyer price stands at US$1,742/mt and 3M Seller price is US$1,742.50/mt. The Opening Stock of the metal is estimated at 2101775 mt.

In China, aluminium traded on Shanghai Metal Exchange opened at US$1,881/mt on Wednesday, December 14, down 2.6% from yesterday's price of US$1,932/mt. SMM says, since market is trading cautiously ahead of Fed rate announcement, base metals will move weakly on Wednesday.

Base metals traded on Shanghai Futures Exchange are showing similar cautious trading. SHFE 1702 aluminium is predicted to test RMB 13,000/mt and will range between RMB 12,920-13,120/mt on Wednesday.

Spot aluminium in China's domestic market should trade at discounts of RMB 80-40/mt on Wednesday, says SMM.

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