Monday's action across the LME complex was a reflection of how the previous week had ended, with early hopes (or fears) on Friday for a bullish afternoon dashed as fresh fund allocations and window dressing failed to materialise. Instead the end of March saw profit-taking from short-term longs, so apart from nickel which rallied on fresh strike news most of the complex continued to drift lower over the morning sessions. As we signed off aluminium had already shed $40 from early highs at 2780 to 2739 and after a short-lived recovery to 2760 values fell back to 2735 in the pm sessions. A test of support starting c. 2720 looked on the cards, though copper came to its rescue, staging a strong finish as nearby spreads were bid again.
Aluminium's nearby spreads eased again after tightening on Friday, with May-3m slipping back to 6.00b from 9.00b and C-3m's interim carries all linear. Forward movement was mostly fractional, though H1 2010 eased by up to $2.00/mth, while 2011 tightened by $3.00-$3.50 in the first half and slackened by the same margin in the second. The sole remaining 'dominant' long held station at 50-80%.
Tuesday morning's news that the residents of the Icelandic town of Hafnarfjordur had voted "not in my backfjord" (thanks to Canada's Globe and Mail for that one!) to Alcan's planned smelter expansion helped the light metal follow copper higher. The vote may impact on other projects in the country, dealers feared, while production plans in Trinidad and Tobago were also finding strong local environmental opposition. LME Select reopened at 2762 and at time of writing prices had moved up to a high of 2798 currently, on turnover of 2,100 lots.
The market had now traversed the 10-, 30- and 100-day moving averages so many times, the charts resembled a mogul field on an alpine afternoon. Cliff Green Consultancy in their latest daily report remained on the sidelines, with prices ranging between resistance up to 2850 and support down to 2710, they wrote.
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