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LME prices hovering around $1,800 per mton

Executive Summary

1. LME prices hover around $1,800 per mton despite ongoing oil price decline

LME 3M aluminum prices closed the session at a three-week low of $1,798 per mton, falling by 0.4% or $8 per mton from Friday as selling pressure predominated amid the ongoing correction in oil prices, which reached a fresh one-month low today, and the dissipation of short-term uncertainty that followed Friday’s announcements of US sanctions against Iranian aluminum producers. Prices reached intraday levels as low as $1,788 per mton but managed to regain some ground late in the session as technical buying continued to arise. Indeed, the key 200-day moving average remains a key technical support threshold (currently at $1,791 per mton).

More details in full report.

2. LME Cash–3M contango narrows to a three-week low but remains premium-supportive.

The Cash–3M contango tightened to a three-week low of $23.00 per mton from Friday’s $25.25 per mton mainly as the January–February contango shrunk to a one-month low of $6.00 per mton from $9.00 per mton. Meanwhile, the February–March contango held without a change at $10.00 per mton for a third-consecutive session, and the March–April contango narrowed to $7.00 from $7.50 per mton. Nevertheless, the Cash–3M contango remains supportive for spot premiums around the world since the current level is still wide enough for most players to profitably finance short-term cash-and-carry deals.

More details in full report.

3. HARBOR’s Implicit Green Aluminum Upcharge assessed today at zero.

Standard Specification: daily duty-paid premium paid over the LME cash price for spot physical 99.7% high-grade aluminum with 4.5 kg or less of CO2 emitted per kilogram of aluminum produced, according to Level 1 disclosure per IAI’s “Aluminium Carbon Footprint Technical Support Document—v1-final—15th Feb 2018.” Level 1 only includes smelter emissions scope 1 and 2 (including anode production and casting operations) and does not include alumina refining and bauxite mining emissions scope 1 and 2.

More details in full report.

4. China’s aluminum prices fall after nearing a four-month high.

SHFE front-month aluminum prices closed the overnight session down 0.2% at 14,475 yuan per mton ($1,858 per mton, excluding VAT). Prices fell after testing intraday levels as high as 14,595 yuan per mton ($1,874 per mton, excluding VAT) amid technical selling pressure and market talk of resuming domestic primary aluminum inventory buildups. Still, prices were somewhat supported by trade optimism due to the expected signing of China-US Phase One agreement this week.

More details in full report.