Weekly highlight: A robust dollar kept LME aluminium under pressure; SHFE traded higher on supply worries caused by typh

The US dollar index edged down in the beginning of the week amid trade tensions between the US and China and concerns of slowing global economic growth. The dollar then started strengthening over the week and rose to 98.14. LME base metals traded mostly lower during the week. SHFE aluminium traded strong as the news of aluminium production in Shandong getting affected by typhoon rallied the most-liquid SHFE contract.

LME aluminium traded lower within a close range. LME aluminium started the week with US$ 1743 per tonne and traded lower over the week. The contract jumped to a high of US$ 1755.5 per tonne on Friday. Three-month LME aluminium also followed the same downward trend starting the week higher at US$ US$1,770 per tonne on Monday and ending higher at US$ 1784 per tonne on Friday.

As on August 16, Friday, LME aluminium cash (bid) price stood at US$ 1755 per tonne, LME official settlement price stands at US$ 1755.50 per tonne; 3-months bid price stands at US$ 1783.50 per tonne, 3-months offer price is US$ 1784 per tonne; Dec 20 bid price stands at US$ 1873 per tonne, and Dec 20 offer price stands at US$ 1878 per tonne.

The LME aluminium opening stock dropped to 969250 tonnes. Live Warrants totalled at 688650 tonnes, and Cancelled Warrants were 280600 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1782 per tonne.

SME and SHFE Aluminium Price Trend

The benchmark aluminium price on Shanghai Metal Exchange (SME) performed better than LME and was on an upward graph. It started the week at US$ 1972 per tonne and reached US$ 2023 per tonne on Friday. 

Supply worries in Shandong caused by Typhoon Lekima bolstered the most-active SHFE October contract to the highest since May 28 at RMB 14,210 per tonne on Monday August 12 and it ended 1.94% higher on the day at RMB 14,185 per tonne. The contract continued to trade higher over the week. Aggressive builds of long positions bolstered the October contract and it closed 0.14% higher at RMB 14,240 per tonne on Friday. SHFE aluminium is expected to consolidate at highs, given firm long positioning. It is likely to move between RMB 14,150-14,350 per tonne over next week.

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