LIVE FUTURES REPORT 25/02: Aluminium, copper rise 2% to new highs

Aluminium’s three-month price was up by 1.85% to $2,225 per tonne at 9am this morning, after a 1.7% gain on Wednesday at the close, which saw the metal rise to $2,184.50 per tonne.

Earlier during trading, the metal reached a new 2021 high of $2,243 per tonne, and its October 2018 high of $2,267 per tonne is now within sight.

Open interest grew by 0.3% on the LME to 897,194 contracts, and by 9am more than 11,000 lots of the light metal had been traded, close to Wednesday’s total volume of 17,500 lots.

There have been continuous outflows from LME warehouses of over 5,000 tonnes per day of the light metal since mid-February, and on Thursday another 5,175 tonnes exited LME sheds, 4,000 tonnes of that in Port Klang, Malaysia. A further 5,025 tonnes were freshly cancelled.

Total LME aluminium stocks, at 1.33 million tonnes on Thursday, are down by 6.7% since the start of the month.

Most of the other LME base metals, the exception being nickel that was down 0.3% at $19,645 per tonne after a 1.8% rise on Wednesday, were higher on Thursday morning, following a plunge in the US Dollar Index to 89.97 from Wednesday’s 5pm reading of 90.28.

US Federal Reserve Chairman Jerome Powell reiterated the central bank’s position on keeping interest rates low and noted that it could take three years to reach its inflation targets.

Copper, meanwhile, continued its unstoppable rally to a new high of $9,617 per tonne during early trading, a $300-per-tonne increase from its Wednesday closing price of $9,308.50 per tonne and its highest since August 2011. At 9am, it was up by 1.9% to $9,486 per tonne.

“Short-term momentum indicators are all positive, but it is worth noting that copper looks overbought – the daily relative strength index [based on the last 14 trading days] is at 88 on a daily basis, its highest since July 2020,” Fastmarkets analyst Boris Mikanikrezai said.

“The next key resistance is at $10,000 per tonne. If it is breached, we do not expect the copper price to move in a straight line. A sharp consolidation may occur thereafter,” he added.

Other highlights

• Tin’s three-month price reached $27,500 per tonne on Thursday during early trading, its highest since July 2011, and was up by 1.7% to $27,170 per tonne at 9am.
• Economic data out later includes US preliminary gross domestic product, gross domestic product (GDP) prices, monthly durable goods orders and initial jobless claims for the week to February 20. This evening, monthly data on Japanese industrial production will be out, too.