As we signed off on Monday aluminium had extended Friday’s steady close to a high of 2760, though despite price-positive factors that had buoyed the whole commodities complex early on, the market wilted in the afternoon. Over the morning sessions prices drifted to a low of 2737, though the fall in the pm sessions was more acute, tumbling rapidly from 2748 to 2715, then 2702 in the second kerb. The rest of its LME compatriots fell too, to varying degrees, with the metals complex diverging from other markets ahead of a negative US homebuilders survey.
Nearby spreads were unchanged, while forward movement was fractional and mixed, apart from a $1.00/mth tightening in H1 2008. The LME’s WC warrant banding report had been clear of holdings for the past couple of weeks, though as at cob Friday (the report is two days delayed) two parties appeared; one at 30-40% and one at 40-50% of all non-cancelled LME stock.
The removal of tax rebates on certain aluminium products was announced by China’s Ministry of Finance on Tuesday morning. The move was designed to curb exports (and subsequently over-production) and was interpreted by analysts as supportive for prices, though at time of writing the news had not affected the LME. So far 3-months had traded loosely in a $20 range on turnover of 1,200 lots, last at 2710.
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