Both LME and SHFE aluminium gained on Friday on falling US dollar; likely to trade rangebound today

The US dollar fell on Friday after the release of weaker-than-expected monthly job report. LME and SHFE base metals ended in the black on Friday night. LME aluminium jumped over 1% SHFE aluminium rose 0.55%.

After dropping to US$ 1945 per tonne on Thursday December 6, LME aluminium recovered the losses and closed at US$ 1962 per tonne on Friday. Then the contract jumped past the 40-day moving average to a high of US$1,977 per tonne on Friday night after the US dollar slid. It closed at US$1,963 tonne, near the five-day moving average. We expect it to continue to move among moving averages with a trading range of US$1,945-1,970 per tonne today.

As on December 7, Friday, LME aluminium cash (bid) price stood at US$ 1961 per tonne, LME official settlement price stands at US$ 1962 per tonne; 3-months bid price stands at US$ 1958 per tonne, 3-months offer price is US$ 1958.50 per tonne; Dec 19 bid price stands at US$ 2013 per tonne, and Dec 19 offer price stands at US$ 2018 per tonne. 

The LME aluminium opening stock dropped to 1042900 tonnes. Live Warrants totalled at 797625 tonnes, and Cancelled Warrants were 245275 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1954 per tonne.

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange increased to US$ 1972 per tonne today from US$ 1965 per tonne on December 7.

The SHFE 1901 contract climbed up along the five-day moving average and rallied above the daily moving average to a high of RMB 13,645 per tonne on Friday. However, it closed 0.26% lower from Thursday at RMB 13,630 per tonne. The  contract then opened higher at RMB13,660 per tonne on Friday night and traded rangebound to finish the trading hours at RMB 13,630 per tonne. It is expected to trade at RMB13,550-13,690 per tonne today with spot discounts up to RMB 40 per tonne.

Market participants today may take some cues from China’s social inventory change of primary aluminium over the weekend.

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