Shanghai aluminium hits 11-month low on firmer dollar, higher China exports
XLB•Shanghai aluminium fell 2.1% to 22,675 yuan a ton, its lowest level in 11 months, pressured by a firmer dollar and rising Chinese exports. Exports of aluminium and aluminium products rose 18% to 5.9 million tons in January-October.
1. Shanghai prices fall
The most-traded aluminium contract on the Shanghai Futures Exchange fell 2.1% to 22,675 yuan ($3,399.4) a ton, after touching its lowest level since mid-December last year. Benchmark three-month aluminium on the London Metal Exchange rose 0.6% to $3,028.50 a ton after hitting a three-week low on Tuesday.
2. Dollar and exports pressure
A firmer US dollar, supported by hotter-than-expected inflation data and hawkish Federal Reserve comments, weighed on prices. 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 and contributed to global supply.
3. Warehouse stocks decline
Falling aluminium stocks in LME-registered warehouses boosted 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, but added it was difficult to say which would happen.
