Another interesting day at the LME asylum Thursday. It had been a busy premarket for aluminium in particular with CTA selling driving prices down from 2660 towards 2620 as we signed off, with technicians looking for a clear (read, 'closing') break beneath 2640. However, volumes were high as trade buyers mopped up cheap offers and after bottoming at 2614 in the am sessions the selling dried up. In the afternoon the dollar slipped against the euro and with markets looking 'sold out', the ensuing rally lifted values to a high of 2695 in late trading. Red Kite Management's statement that its investors had "overwhelmingly" voted to lengthen its funds' redemption-notification period had given buyers renewed confidence.
C-3m was unchanged overall, though nearby tightness to Feb21 ebbed somewhat, while short-covering in the tail end of the spread made up part of the difference. Forward rates were typically $1.00/mth firmer to end 2008 and similarly easier in 2009 and 2010. This morning's WC warrant banding update from the LME again had one party at 90+% and another at 30-40%.
So far on Friday morning it had been quieter than yesterday, with prices ranging between 2697 and 2671 on turnover of 1,700 lots. Resistance hereabouts was bolstered by the 100-day moving average at 2702, while the 10-day MA looked set to cross down through it in coming sessions. As index fund rolls wore down nearby tightness and weighed on prices, talk of short spot supply in China ahead of the Lunar new year's holiday was keeping trade interest buoyant, locals said.
In last night's report, Cliff Green Consultancy remained sidelined for as long as the broad range prevailed. Only a clear break below 2610 or above "the critical 2850/70 zone" would provide a clear directional signal, they added.
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