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

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April 2019 | Base Metals


Aluminium: Short-term risks to the downside


Aluminium prices continue to range-trade, as macro developments and the market’s own fundamentals are giving mixed signals. This range-trading has been forming a potentially technically bearish rising wedge. Of all the base metals, investors are most bearish towards aluminium, which suggests they are positioning for this wedge to break to the downside. Concerns over rising Chinese and Russian supply provide a fundamental justification for taking a bearish view, but this is plenty of ammunition for short-covering rallies if that view is abandoned.

Prices continue to range-trade, shrugging off positive macro news...
Aluminium prices continued to trade sideways-to-lower last week, even though macroeconomic news was generally positive from the US and Germany, while China said it would lessen residency curbs in many of its small cities and increase infrastructure spending to boost economic growth.

...due to the strong dollar and LME on-warrant material increase

The weekly LME average aluminium cash price still fell 0.6% to $1,869 per tonne last week. The reason behind the fall was the stronger dollar on the back of the good US jobs report, as well...

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