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

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May 2019 | Base Metals


Aluminium: Difficult not to be bearish


Although funds remain heavily short aluminium, which could provide ammunition for short-covering rallies if a positive trigger emerges, it is difficult not to be bearish on the near-term prospects for the LME aluminium price. This is because of the fundamental backdrop of rising supply – particularly out of China – at a time when the demand outlook has been clouded by the re-escalation of the US-China trade war. Aluminium would do well to cling to $1,800 per tonne while awaiting a new catalyst to set its next directional bias.

Global markets strained by the US-China trade talk

Global financial markets remained under selling pressure at the start of a new trading week on Monday May 13 after US-China trade talks ended without a deal being struck. Compounding the bearishness is the fact that the US raised tariffs on $200 billion worth of Chinese goods on Friday, while China responded that it would not surrender to foreign pressure and would implement tariffs of its own on US goods. This has seen follow-through selling emerge in global equity markets after investors’ confidence to hold or purchase risky assets deteriorated against this less friendly backdrop, which has...

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