LIVE FUTURES REPORT 29/11: 42kt of aluminium flows into LME warehouses

A significant 42,050 tonnes of aluminium was put back into London Metal Exchange-approved warehouses on the morning of Friday November 29 while metal holders’ bids to put nearby spreads into contango continue but as yet remain unsuccessful.

A total of 25,275 tonnes entered LME-approved sheds in Port Klang, Malaysia, while 15,800 tonnes was delivered into warehouses in Singapore. A smaller delivery of 875 tonnes entered warehouses in Johor, Malaysia.

This saw total LME aluminium stocks rise to 1,271,650 tonnes this morning – stocks are now up by 8.7% since November 20, when they totaled 1,169,525 tonnes.

But only a slight easing has occurred in the December-January spread, which was recently trading in a $13-per-tonne backwardation from a marginally wider $13.25-per-tonne backwardation on Thursday.

Much like nearby spreads, the LME three-month aluminium price remains unmoved by ongoing inventory inflows, holding around $1,754 per tonne this morning, a slight $1.50-per-tonne decrease from Thursday’s kerb close of $1,755.50 per tonne.

But traded volumes so far this morning outstrip that for the entirety of Thursday with the United States back in the market post-Thanksgiving, with nearly 1,500 lots traded by 9.30 am London time while just 1,377 lots changed hands the previous day.

The three-month nickel price continues to be the most pressured of all LME base metals, trading down by 0.9% at around $13,875 per tonne from the previous day’s close of $14,010 per tonne and showing no signs of regaining ground above the $14,000-per-tonne level.

LME nickel futures remain macro sensitive, seemingly an ongoing barometer of US-China trade tensions, which serves only to exacerbate doubts over stainless steel demand for material amid weak Chinese industrial production data.

“Yesterday saw the metals market go into sell mode with nickel coming under the most pressure and breaking through the $14,000 level,” Kingdom Futures chief executive officer Malcolm Freeman said in a morning note on Friday.

“The apparent trigger for the sell-off was US Presidential support for protestors in Hong Kong. This irritated the Chinese, to put it mildly, and the net result was that hope for a trade deal could be signed this year had now pretty much evaporated,” Freeman added.

Other highlights
  • The US dollar index continues to trade in high ground, up by 0.05% at 98.36, and weighing on the majority of LME base metals three-month prices, most of which are capped during the morning’s trading session.
  • LME three-month lead price has made marginal gains, trading up by 0.6% at around $1,957.50 per tonne this morning.

Amy Hinton

amy.hinton@fastmarkets.com

Published

Amy Hinton

November 29, 2019

10:00 GMT

London