The light metal’s three-month price began the day trading at around $1,777.50 per tonne, before a 1.3% climb led the metal to breach nearby resistance at $1,800 per tonne and, at a dollar above that, reach its highest level since August 19.
Volumes traded in aluminium topped the complex over the morning, with some 4,400 lots exchanged as at 9.30am London time.
Yet despite total LME aluminium stocks being close to their lowest level since 2007 at 920,000 tonnes this morning, price action in aluminium has failed to react to a steady drawdown in inventories over the summer period
Meanwhile, three-month nickel futures have spent most of the morning trading lower. But despite the metal’s price falling to an intra-morning low of $17,400 per tonne, nickel futures have recovered nearly 3%, recently trading close to $17,800 per tonne.
Yet despite waves of buying, near-term business in nickel is now increasingly costly, with the metal’s benchmark cash/three-month spread recently trading in a $53-per-tonne backwardation, narrowing from a $17.50-per-tonne backwardation on Friday.
“Traders are showing little inclination to buy much metal at the moment, save what they have to, and investors are getting more nervous as the geopolitical situation gets ever harder to read,” Kingdom Futures director and chief executive Malcolm Freeman said in a morning report.
“The one point to note is that the falls are far faster and more explosive than the rallies in their nature,” he added.
- Elsewhere in the complex, three-month tin futures were also trading more than 1% lower over the morning, trading just above $17,100 per tonne after reaching an intra-morning high of $17,460 per tonne.
- The dollar index was lower over the morning, falling by 0.01% to 98.41.
- In other commodities, Brent crude oil futures were up by 0.42% over the morning, climbing to $61.90 per barrel.
- In data from the European on Monday, the United Kingdom’s gross domestic product (GDP) figures month on month for the July period were better than expected with an increase of 0.3%, while the country’s manufacturing production over the same period similarly topped expectations with a gain of 0.5%.