Aluminium played its joker on Thursday. As we signed off yesterday prices were trading sideways around 2770 with the market looking somewhat precarious after Wednesday's options play had expired without incident. Locals were poised for further fallout with the market seemingly having failed to surmount the technically important 2850/60 area and in the process recorded a potential 'double top' there. All else was on the slide, but as the rest of the complex faltered aluminium blew a raspberry and shot higher again. It had observers and commentators scratching their heads, though as 3-months held on to the 10-day moving average c. 2770 the nearby spreads were bid again, getting shorts scrambling for cover once more. In the last hour of open outcry trading prices burst from 2770 to a peak of 2825!
Just as it looked like the December 'play' had come undone, C-Dec20 reversed out to 2.00b (2.00c), Dec20-Jan10 ended at 2.00b (3.00c), Jan-Feb shrunk to a linear 2.00c (6.00c) and Feb-3m finished at 8.00b (5.00b). The dominant 50-80% holder in the LME's WC report, which we first noted a week ago, remained there in this morning's missive. Just beyond 3m, the Mar-Apr backwardation doubled to 12.00b, while the rest of 2007 and 2008 tightened throughout by up to $2.50/mth.
On Friday morning in Asia Select reopened at 2813 and had at time of writing traded in a 2808-2825 band on turnover of some 1,400 lots. So, was this a second bite at the cherry for producers in China and elsewhere, or simply another chapter in the December 'play' that locals have been following for some months? Talk remained of a large fund potentially taking the market higher, though gravity was not on its side. With plentiful producer selling seen at key levels and technicians such as Cliff Green Consultancy seeing 'important' chart resistance c. 2840/60 there would be a lot of buying to do to take it through. Success or failure there held the key to aluminium's short term direction, they had noted. Last at 2810.
豫公网安备41010502003434号