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Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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February 2019 | Base Metals


Aluminium: Dull fundamentals, brighter technicals


While demand concerns and the prospect of rising supply from China and Rusal remain negative fundamental factors that create downside risks for aluminium prices, the market has actually been dragged higher recently and is approaching potentially pivotal technical resistance. This is significant because aluminium’s speculative positioning looks the most stretched on the short side of all the base metals. So a technical break-out could trigger a powerful short-covering rally, especially if broader sentiment continues to improve as progress is made in US-China trade talks.

Prices supported by US-China trade talk progress
Aluminium and the other base metals continue to benefit from lingering optimism over apparent progress being made in the trade talks between China and the US, with President Donald Trump confirming over the weekend that he would delay a planned increase on tariffs against Chinese imports as talks between the two sides were making substantial progress.

The weekly average LME aluminium cash price was $1,847 per tonne last week, up 0.5% from the previous week's $1,837 per tonne, but trading has begun this week closer to the $1,900 per tonne level on the back of...

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