Three-month LME aluminium moves higher to reach the highest since July 26; SHFE trades range bound

The US dollar stayed in its recent tight range and the index, which tracks the greenback against a basket of other currencies, gained 0.04% to end at 98.37 yesterday. LME base metals closed mixed while SHFE settled mostly higher on Tuesday. LME aluminium gained 1.2% and SHFE aluminium grew 0.1%.

LME aluminium continues trading higher after the low phase. Three-month LME aluminium moved higher to touch the highest level since July 26, at US$1,825 per tonne, before it gave up some gains and closed 1.19% higher at US$1,821.5 per tonne. It has shrugged off pressure from the Bollinger upper band, and may trade between US$1,780-1,830/mt today.

As on September 10, Tuesday, LME aluminium cash (bid) price stood at US$ 1775.50 per tonne, LME official settlement price stands at US$ 1776 per tonne; 3-months bid price stands at US$ 1803 per tonne, 3-months offer price is US$ 1804 per tonne; Dec 20 bid price stands at US$ 1875 per tonne, and Dec 20 offer price stands at US$ 1880 per tonne.

The LME aluminium opening stock dropped to 916825 tonnes. Live Warrants totalled at 707400 tonnes, and Cancelled Warrants were 209425 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1802 per tonne.

The most traded SHFE 1911 contract slightly weakened in seesaw trade, as traders weighed consumption pick-up against supply recovery. It lost 0.35% on the day to end at RMB 14,355 per tonne yesterday. Loaded-up longs buoyed the most-active SHFE November contract to highs around 14,410 per tonne, before it closed at RMB 14,390 per tonne overnight, up 0.24% on the day. The K-indicator is expected to continue to move along the five-day moving average, and keep the contract between RMB 13,350-14,450 per tonne today.

An increasingly greater number of primary aluminium smelters have decided to resume their capacity after SHFE aluminium prices recovered from a low season. This indicates a bearish market outlook for Q4 2019. For SHFE aluminium to move further higher, it needs to see encouraging consumption data.

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