LME aluminium dipped overnight yesterday with rising US dollar; SHFE likely to trade rangebound

US Treasury bond yield curve inverted for the first time since 2007 on Wednesday, which sparked fears of an economic recession and led to a plunge on Wall Street. The US dollar index rose 0.16% to 97.98. LME base metals closed lower on Wednesday.  LME aluminium dipped 0.06% and SHFE aluminium rose 0.3%.

LME aluminium gained during day’s trading and closed higher, however, the contracts lost gained overnight with the rising dollar. Three-month LME aluminium slipped to an intraday low of US$1,769 per tonne, before it rallied to end the day a tad lower at US$1,784.5 per tonne. It is expected to trade between US$1,760-1,850 per tonne today.

As on August 14, Tuesday, LME aluminium cash (bid) price stood at US$ 1740.50per tonne, LME official settlement price stands at US$ 1741 per tonne; 3-months bid price stands at US$ 1772.50 per tonne, 3-months offer price is US$ 1773 per tonne; Dec 20 bid price stands at US$ 1865 per tonne, and Dec 20 offer price stands at US$ 1870 per tonne.

The LME aluminium opening stock dropped to 984250 tonnes. Live Warrants totalled at 693175 tonnes, and Cancelled Warrants were 291075 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1786 per tonne.

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange (SME) increased to US$ 2019 per tonne today from US$ 2011 per tonne on Wednesday.

The most-active SHFE October contract continued to hover at highs, driven by loaded-up longs and departing shorts. It climbed to an intraday high of RMB 14,205 per tonne and finished at RMB 14,175 per tonne, down 0.1% on the day. The October contract fluctuated to end 0.28% higher at RMB 14,200 per tonne overnight. SHFE aluminium is unlikely to extend its gains, as demand has yet to reach a high-season level. It is expected to trade rangebound in the short run, and to trade between RMB 14,000-14,200 per tonne today. Spot prices are seen in a discount of RMB 20 per tonne to a premium of RMB 20 per tonne today.

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