Aluminium was one of the more pedestrian markets in the metals complex on Monday, the first day back in earnest after the jollifications of LME Week. Trading sideways at the outset prices hovered around Friday’s closing levels between 2647-2625, though things started picking up as the morning sessions got underway. Tin and zinc led the afternoon’s rampage, though aluminium got going on what looked like “third Wednesday” pricing and more aggravation in the spreads around the December date. Outright prices trailed the rest higher towards technical resistance at 2690 in the pm kerb, easing off somewhat at the close.
Contangos up to Dec 20 remained more or less undisturbed, though Dec20-22 ended rated at 5.00b (1.13b), while another 4 days rolling into the period saw Dec22-3m (Jan16) valued at 15.00b. Increased tightness in the forwards was mostly incremental with layers of producer selling ever-present, though Jan-Feb’07 flared out to 25.00b (15.00b) and Feb-Mar was also worth 25.00b (19.50b).
Volumes on Tuesday morning were healthier than in recent weeks, having clocked up 2,300 lots at time of writing via Select. Trading resumed at 2682 in Asia and in the first instance values rose to 2717, only to drop back like a brick to opening levels. As we went to press aluminium had recovered again and continued to benefit from a freshly optimistic mood in the market, mostly inspired by stock shortages and fresh supply disruptions in other metals. Stronger metals prices had pushed mining shares up sharply yesterday, in turn pushing the UK’s FTSE equities index to a 5-year high. This in turn made London-based metals traders with share portfolios feel happier oil and gold were forgotten -- and the self-fulfilling prophecy was complete! Last at 2700, with the upper band of Cliff Green Consultancy’s resistance pegged at 2710. A clear and sustained break above there would provide a base capable of supporting moves towards 2900 and ‘even’ 3050, they wrote in a daily report.
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