LIVE FUTURES REPORT 30/03: Fresh 24kt inflow pressures LME aluminium price; risk-off sentiment sees complex weaker

The three-month aluminium price on the London Metal Exchange was lower during morning trading on Monday March 30, with price action falling by around 1.6% after more than 24,000 tonnes of metal was delivered back to LME-registered warehouses across Asia.

Aluminium’s underlying price on the LME was recently seen at $1,528.50 per tonne, down by $17 per tonne from Friday’s closing price of $1,545.50 per tonne, while turnover was moderate at some 4,464 lots exchanged as of 9:45am London time.

Prompting the decline, some 22,325 tonnes of primary aluminium was shipped into Port Klang, while another 2,100 tonnes was sent to Johor. Total LME on-warrant aluminium stocks now sit at 994,000, up by more than 20% this month, but down from more than 1 million tonnes at the start of the year.

Open interest in the light metal has also climbed over the weekend, increasing to a total of 957,019 total positions, but similarly down from more than 1 million positions at the beginning of the year.

Meanwhile, aluminium’s forward spreads remain wide, with the metal’s benchmark cash/three-month spread recently seen in a $28.50-per-tonne contango.

Yet broad selling across the LME base metals complex remains in place this morning, largely due to continued risk-aversion against persistent uncertainty over the economic impact of the global outbreak of Covid-19.

“China seems confident that the rebuild of the economy can start, albeit cautiously, and that will naturally see them consume metals, but the loss of consumption from Europe and the rest of Asia will hit the balance and that is before the effects are truly seen in the US,” Kingdom Futures director and chief executive Malcolm Freeman said in a morning note.

Elsewhere in the complex, the three-month zinc price was down by more than 1% this morning, recently trading at $1,851 per tonne, down from Friday’s closing price of $1,878 per tonne.

Turnover was moderate at just over 3,000 lots exchanged as at 9.55am London time.

This comes despite a fresh cancelation of some 2,575 tonnes out of LME warehouses in Singapore, taking total on-warrant material down to 56,100 tonnes, while the bulk of deliverable stocks remain in Vlissingen.

LME zinc’s cash/three-month spread was recently seen in a $10.25-per-tonne contango.

Other highlights

  • In other commodities, Brent crude oil futures were down by 7.14%, recently trading at $26.26 per barrel.
  • The US dollar index was recently trading 0.49% higher at 98.69.
  • In European data released this morning, the Spanish flash consumer price index (CPI) on a year on year basis for the March period climbed by 0.1%, missing an expected climb of 0.6%.
  • From the United Kingdom, mortgage approvals for the March period were recorded at 74,000, up from 71,000 at the prior reading and beating an expected level of 68,000.