After Friday's excitement throughout the LME, Monday was a bit of a let-down with markets generally stabilising apart from nickel, which now pulled lower in line with others. Aluminium had a steadier session mostly, picking up from 2720 to a morning high of 2747, though resistance at the 30- and 10-day moving averages (respectively) stemmed the rise. Higher prices proved unsustainable with volumes thin and as the dollar rallied on better than expected US ISM figures the market tumbled back to an aftermarket low of 2702.
Amid speculation that the dominant nearby long position in aluminium was causing its owner much financial pain, WC warrant banding was little-changed as at cob Friday. The report that totals all parties' cumulative Warrants/Tom/Cash positions and reflects them as a percentage of total 'open' LME stocks now showed one party with 80-90% -- one rung lower from yesterday – and a new entrant with 30-40% of the same tonnage. Nearby spreads were thus unchanged, while forward rates tightened a notch in most places. The biggest talking point among dealers however was an overnight increase in C-Feb21 open interest of 11,767 lots; just as February options declarations loomed…
Tuesday morning could only be described as 'dull' so far, with the light metal flatlining circa 2710 on turnover of less than 800 lots currently.
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