LIVE FUTURES REPORT 14/11: LME aluminium price ignores 78kt inflow; tin improves

The three-month aluminium price on the London Metal Exchange was little moved during morning trading on Thursday November 14, ignoring a fresh inflow of more than 78,000 tonnes into LME-registered Asian warehouses.

Price action in the light metal was recently seen at $1,764 per tonne, just a dollar below Wednesday’s closing price. Turnover was moderate, with just under 2,350 lots exchanged as of 9:20am London time. 

But the delivery marks the largest single inflow for LME aluminium since May, when aluminium’s outright price was trading comfortably above $1,850 per tonne. 

The inflow saw just over 51,000 tonnes delivered into LME-listed warehouses in Johor, while a further 15,175 tonnes were sent into Singapore. Some 9,300 tonnes were also delivered to Port Klang sheds, taking LME on-warrant stocks in aluminium up to 870,250 tonnes. 

Meanwhile, aluminium’s forward spreads continued to soften as a result, but remain in backwardation, with the metal’s benchmark cash/three-month spread recently seen in a $0.50 per tonne backwardation. 

“The combination of an uncertain macroeconomic backdrop, in regard to US-China trade relations, as well as an increasing inflow of metal into the LME warehousing system is fueling the downside momentum for now. As such, sellers should remain in charge of the complex for a little longer,” Fastmarkets analyst Andy Farida said in his Aluminium Today report. 

Elsewhere in the base metals complex, the three-month tin price topped gains over the morning session, recently trading 1.5% higher at $16,255 per tonne, while turnover was high at more than 100 lots exchanged as of 9:45am London time. 

Prompting slightly higher price action, a fresh cancelation of some 300 tonnes across LME-listed sheds in Port Klang and Singapore took LME on-warrant material down to 5,680 tonnes, with canceled material in tin now approaching 1,000 tonnes. 

Forward spreads in tin remain positive, with the metal’s cash/three-month spread recently trading in a $9 per tonne contango.

Other highlights

  • The dollar index was higher over the morning, climbing by 0.02% to 98.33.
  • In other commodities, Brent crude oil futures were up by 0.32% to $62.78 per barrel.
  • In economic data released on Wednesday, the United Kingdom’s consumer price index (CPI) figure on a year on year basis for the October-November period stood at 1.5%, missing an expected fall to 1.6% from 1.7% in the prior reading. 
  • The US CPI figure on a month on month basis in October rose to 0.4%, from a flat level in September. 
  • In data from the European Union this morning, the German preliminary GDP figure quarter on quarter for the October period improved by 0.1%.
  • Meanwhile, the UK’s retail sales month on month over the same period fell by 0.1%, missing an expected rise of 0.2%.
  • Later, the United States is expected to release figures on its producer price index (PPI).  

Hassan Butt

hassan.butt@fastmarkets.com

Published

Hassan Butt

November 14, 2019

11:03 GMT

London