LME aluminium extends decline on Monday for the second day in a row; SHFE recovered from earlier losses

The US dollar rebounded slightly against a basket of other currencies on Monday, after touching a three-week low on Friday, as details of the partial trade deal between the US and China remained hazy and investors fretted about the ongoing twists and turns on Britain’s exit from the European Union. LME base metals, except for copper, closed lower on Monday. SHFE  aluminium gained 0.2%.

Three-month LME aluminium dropped to a one-week low of US$1,710 per tonne on Monday, before it recovered some ground to finish the trading day 0.17% lower at US$1,719 per tonne. A rally in the US dollar weighed on base metals on Monday. LME aluminium is expected to trade between US$1,700-1,740 per tonne today.

As on October 14, Monday, LME aluminium cash (bid) price stood at US$ 1704 per tonne, LME official settlement price stands at US$ 1704.50 per tonne; 3-months bid price stands at US$ 1715 per tonne, 3-months offer price is US$ 1716 per tonne; Dec 20 bid price stands at US$ 1800 per tonne, and Dec 20 offer price stands at US$ 1805 per tonne.

The LME aluminium opening stock increased to 983600 tonnes. Live Warrants totalled at 810650 tonnes, and Cancelled Warrants were 172950 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1722.99 per tonne.

Benchmark aluminium price for SHFE (Shanghai Future Exchange) has decreased to USD 2049 per tonne today, 15 October 2019.

Capital withdrawal drove the most-liquid SHFE November contract 0.69% lower by Monday’s close, extending losses from the previous four sessions. Open interest lost 10,618 lots to 179,490 lots as both long and short positions exited. The backwardation in SHFE November and December contract narrowed, with a price spread of RMB 20 per tonne. The most traded SHFE 1912 contract recovered from earlier losses to close 0.15% stronger at RMB 13,755 per tonne overnight. SHFE aluminium bucked the downtrend across base metals overnight, as it already stayed at lows after recent declines. It is expected to trade between RMB 13,690-13,800 per tonne today, with spot premiums of RMB 10-40 per tonne.

Weaker-than-expected consumption recovery grew worries about nearby supply pressure, but continued drawdown in domestic stocks may underpin prices in the short term.

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