Tuesday's 'action' in aluminium was sideways only with prices sticking to a narrow $20-trading range, in an air of anticipation ahead of today's options declarations and dealers trying to second-guess what was afoot in nearby open interest.
We noted yesterday that open interest in C-Feb21 had jumped 11,767 lots overnight, sparking rumours of large deliveries as Tom/Next traded into contango. In the end the period eased by a mere $3.00 to 26.00b, while the rest of C-3m stayed firm.
On Wednesday morning all eyes were on February's 2850 Call options, though with 3m peaking at 2719 and Feb-3m rated at 92b bid, the market fell short of the target. The result was a sell-off after expiration time, falling to a low currently of 2680 with total volumes at 2,150 lots. Notable this morning was a fall this time in C-Feb open interest, now shrinking by a whopping 14,156 lots. In the mean time, the LME's updated WC warrant banding report as at cob Monday saw the dominant long step back up to the top level with an equivalent of 90+% of non-cancelled stocks, while another party retained 30-40% of same.
As we went to press, aluminium slipped to 2675, headed towards the 200-day moving average located c. 2655.
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