Shanghai aluminium hits 11-month low on firmer dollar, higher China exports
XLB•Shanghai aluminium fell 1.6% to 22,795 yuan ($3,415.39) a ton, after touching its lowest level since mid-December, as a firmer dollar and higher Chinese exports pressured prices. China’s aluminium and aluminium-products exports rose 18% to 5.9 million tons in January-October.
1. Shanghai prices fall
The most-traded Shanghai Futures Exchange aluminium contract fell for a second consecutive session on Wednesday, dropping 1.6% to 22,795 yuan ($3,415.39) a ton by 0700 GMT after reaching an 11-month low. The London Metal Exchange’s three-month aluminium benchmark rose 0.9% to $3,035.50 a ton, after hitting a three-week low on Tuesday.
2. Exports and dollar weigh
China’s exports of aluminium and aluminium products rose 18% to 5.9 million tons in January-October. Marex analyst Ed Meir said the trade data pressured prices, calling the increase a “stunning contribution to global supply.” A stronger dollar, near a two-week high, also made dollar-denominated metals more expensive for holders of other currencies.
3. Warehouse stocks decline
Falling aluminium stocks in LME-registered warehouses lifted the premium on the near-term contract over the three-month benchmark. Meir said either prices would need to rise or the spread would have to narrow, adding that it was difficult to say which would happen.
