Weaker dollar gave support to LME aluminium yesterday, SHFE aluminium traded rangebound

The US dollar weakened for a second straight day to month lows against a basket of its rivals on Wednesday after bleak US retail sales data painted a gloomy picture of the economy and supported the case for further interest rate cuts by the Federal Reserve. LME base metals closed lower on Wednesday and aluminium dipped 0.1%. SHFE aluminium inched up 0.1%.

Three-month LME aluminium recovered from earlier losses to end 0.12% weaker at US$1,727.5 per tonne on Thursday. Traders aggressively covered long positions on Wednesday, as they see limited upward momentum in LME aluminium with high inventories across LME-approved warehouses. A weaker US dollar might provide some support to base metals today. LME aluminium is expected to trade between US$1,710-1,740 per tonne.

As on October 16, Wednesday, LME aluminium cash (bid) price stood at US$ 1703 per tonne, LME official settlement price stands at US$ 1703.50 per tonne; 3-months bid price stands at US$ 1714 per tonne, 3-months offer price is US$ 1715 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 983525 tonnes. Live Warrants totalled at 817725 tonnes, and Cancelled Warrants were 165800 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1728 per tonne.

Benchmark aluminium price for SHFE (Shanghai Future Exchange) has decreased to USD 1991 per tonne today, 17 October 2019.

The most-active SHFE December contract continued its rally that began on Monday as bearish sentiment eased after previous consecutive days of decline. It rose to an intraday high of RMB 13,840 per tonne and ended up 0.62% on the day at RMB 13,855 per tonne yesterday. The contract then advanced 0.11% to RMB 13,815 per tonne overnight, approaching the five-day moving average. SHFE aluminium, faced with a resistance confluence of the 10- and 40-day moving averages, is expected to trade between RMB 13,750-13,900 per tonne today. Spot premiums are seen at RMB 30-70 per tonne. Lower costs and supply recovery, in the long run, may cap the upside room in prices.

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