Trade buyers nibbled away at aluminium on Monday after prices fell below 2700 on Friday, though trading remained tentative. Market-wide jitters about inflation and rising interest rates calmed somewhat and among the LME complex copper, zinc and lead all gained on strike talk. The light metal bottomed initially at 2693 and as we signed off values had lifted fleetingly to 2735, though the 200-day moving average c. 2726 provided plentiful resistance. As the day progressed the market eased back to 2710 and bounced to 2731 in the afternoon, though never looked like making any real progress in either direction.
With June’s options having expired last week the nearby contango continued to stretch yesterday, with Aug-3m slipping to 16.00c, from 8.00c on Thursday. Forward backwardations were typically $0.50/mth steadier from 2008 t0 2011.
Overnight confirmation of copper strike action in Canada gave the red metal a fillip on Tuesday morning and aluminium followed it to a high of 2740 initially, though by time of writing prices had fallen back rapidly to 2709. Volumes were rather thin so far, at only 660 lots via Select. Initial support remained c. 2660, suggested Cliff Green Consultancy, with ‘strong’ technical resistance pegged at 2765, the trading strategists wrote in a report. Last at 2715.
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