Three months aluminium gained overnight on weak greenback; SHFE likely to trade rangebound today

The US dollar dipped on Tuesday after comments from Federal Reserve Chair Jerome Powell fuelled expectations of a cut in interest rates. LME base metals closed mixed on Tuesday. Aluminium climbed 0.6%. SHFE base metals also saw mixed performance overnight. Aluminium traded marginally lower.

After closing the day's trading weaker, the three-month LME aluminium got boosted by the falling greenback on Tuesday. The contract gained 0.62% to close at US$1,785 per tonne overnight. The loading up of long positions primarily accounted for the gains. Three months LME aluminium is expected to trade between US$1,760-1,810 per tonne today.

As on June 4, Tuesday, LME aluminium cash (bid) price stood at US$ 1751 per tonne, LME official settlement price stands at US$ 1751.50 per tonne; 3-months bid price stands at US$ 1775 per tonne, 3-months offer price is US$ 1776 per tonne; Dec 20 bid price stands at US$ 1888 per tonne, and Dec 20 offer price stands at US$ 1893 per tonne.

The LME aluminium opening stock stood at 1131900 tonnes. Live Warrants totalled at 713575 tonnes, and Cancelled Warrants were 418325 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1774 per tonne.

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange (SME) decreased today to US$ 2037 per tonne from US$ 2038 per tonne on Tuesday. 

The most-active SHFE July contract fell to the lowest since May 10 at RMB 14,030 per tonne and closed at that level, down 0.81% on the day. Bearish sentiment about macroeconomic development and expectations of a seasonal lull kept the contract at lows around RMB 14,055 per tonne over the day. The liquidation of close to 3,000 lots of short positions helped the most traded SHFE July contract to recover from earlier losses overnight before it ended marginally lower at RMB 14,070 per tonne. The contract will face resistance from the cross-over of the five- and 40-day moving averages. It is expected to trade rangebound between RMB 14,000-14,200 per tonne today, with spot premiums of RMB 10-30 per tonne over the June contract.

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