Greenback hit a four-month high against the Chinese Yuan at the beginning of the week. The Yuan slid with the escalation of trade war between the US and China. The US dollar rose to the highest since May 3, at 97.88 on May 17 Friday, as better-than-expected US data boosted investors’ risk appetite, even as the US and China remained locked in a trade dispute. LME aluminium started its upward trend at the beginning of the week and continued rising. The cash settlement contract hovered within a range of US$ 1765.5 per tonne to US$ 1832 per tonne over the week and ended the week slightly lower at US$ 1805 per tonne on rising dollar. The three months aluminium price closed the week at US$ 1835 per tonne. The lifting of Section 232 tariffs on Canada and Mexico will determine the movements of LME aluminium in the coming week. The three months contract is likely to trade within a broad range in the coming week.
As on May 17, LME aluminium cash (bid) price stood at US$ 1804.50 per tonne, LME official settlement price stands at US$ 1805 per tonne; 3-months bid price stands at US$ 1834 per tonne, 3-months offer price is US$ 1835 per tonne; Dec 20 bid price stands at US$ 1945 per tonne, and Dec 20 offer price stands at US$ 1950 per tonne.
The LME aluminium opening stock stood at 1239975 tonnes. Live Warrants totalled at 757725 tonnes, and Cancelled Warrants were 482250 tonnes.
LME aluminium 3-months Asian Reference Price is hovering at US$ 1848.13 per tonne.
SME and SHFE Aluminium Price Trend
The benchmark aluminium price on Shanghai Metal Exchange had an active run all through the week. The price ranged within US$ 2071 per tonne to US$ 2088 per tonne over the week.
The most active SHFE July contract traded rangebound at highs during the week, holding onto gains to close 0.35% higher at RMB 14,335 per tonne. Recent strong performance in SHFE aluminium was in part bolstered by rising prices of alumina. SMM data also showed that social inventories of primary aluminium in China continued to fall this week, down 63,000 tonnes from a week ago, pointing to robust demand.
The loading up of short positions forced the most traded SHFE July contract to give up overnight gains to close the trading day 0.28% lower at RMB 14,310 per tonne yesterday. Despite the pullback, rising alumina prices and declining inventories of primary aluminium will remain supportive of SHFE aluminium. The contract is expected to trade within RMB 14,200-14,500 per tonne in the coming week.