As we signed off Wednesday aluminium and the rest of the
LME complex were trading quietly, with the light metal looking like fading after failing to progress beyond resistance c. 2830/40 on Monday. The likes of Cliff Green Consultancy had given up the ghost on that basis and had shorted the market, so they reported, while copper too appeared to be struggling to surmount $8000. We left the light metal in a dull premarket, trading in a $12-range c. 2800, looking for some definitive news to provide direction. Apart from the reams of guff about Alcoa bidding for Alcan, about Rio Tinto bidding for Alcan and about BHP Billiton eyeing a tilt at Alcoa, there was little news about, though consumer buying and short-covering elsewhere ensured a steady second half to the day. From 2805 prices ran to a pm high of 2838, though the move still left local commentators unenthused.
Nano-movement in nearby daily contangos left C-3m little-changed overall, while forward backwardations were a smidgeon steadier on a firm 3-month close. The status quo in the
LME’s WC warrant banding stakes was undisturbed.
On Thursday morning confirmation of Rio’s all-cash bid for Alcan spread a little optimism around the market, while the move was expected almost certainly to put Alcoa in play too. In the immediate term these corporate actions would matter little to global production, though due diligence may put marginal operations and new projects under the microscope. In the event, 3-month prices were somewhat steadier on the ‘feelgood’ factor, peaking at 2841 so far, though volumes continued to lag with only 1,200 electronic lots having changed hands. CGC retained its shorts yesterday, they wrote in a daily update, with stops placed somewhat above ‘strong resistance’ up to 2840. Copper had also started strongly after news of fresh strike action in Zambia, though as we signed off those aluminium producers had kept prices in check. Last at 2833.
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