Along with the rest of the LME complex and other markets aluminium lost more ground on Friday. By the time we signed off prices had fallen back from 2744 to 2707 as fund managers continued to liquidate investments across exchanges, dragging equities, oil and precious metals lower. Among the base metals nickel suffered particularly, after the LME’s intervention to improve nearby liquidity. As the morning progressed the dollar strengthened and the light metal continued to a low initially of 2692, latter bottoming at 2687 after an afternoon bounce to 2724.
The nearby contango widened with Aug15-3m easing from a linear 8.00c to 12.00c, while forward backwardations slackened too with Dec’07-Apr’08 halving from 30.50b to 15.00b. The LME’s WC warrant banding report remained empty.
On Monday morning trading was tentative as all markets bounced gingerly, with last week’s falls offering value for trade buyers, though a free-for-all it wasn’t. Aluminium’s turnover so far was no better than 1600 lots and after lifting from an early low of 2693 the market was finding resistance above 2720, where the 200-day moving average was now located. While short term trends were down, Cliff Green Consultancy as yet saw no sign of a break out from the long-established trading range. Nearby support was pegged c. 2660 they wrote in a report, the next at 2610, while resistance would now start at 2760. Last at 2720.
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