MI Comment: Aluminium stuck in doldrums

Having failed again to make an impression on overhead resistance at 2840 aluminium pulled lower on Friday, making the low of the week at 2775 before recovering towards the end of play. The recent elimination of Chinese export tax rebates for semi-finished products could now be followed by the introduction of a new 15% export tax, LME locals had it, while endless speculation about a possible bidder emerging for Alcoa kept the rumour mill spinning. In substance, there was little to go on in the pm sessions, though after the copper market digested news of an end to strike action at Collahuasi, prices recovered from the consequent slide as a strong US consumer confidence reading outweighed weak retail sales for June. The light metal lifted to 2806 before slipping back to end just ahead of the 100- and 10-day moving averages. The C-3m spread remained near full contango, though Aug-Sep narrowed very marginally, while Sep-3m drifted wider by another US¢6 per day. Forward rates had tightened markedly on Thursday, though Friday they slipped again, losing $0.50-$1.00/mth into 2011. There was however still no change in the LME’s WC report, with two parties each with positions equal to 30-40% of all non-cancelled stock. The C-3m spread remained near full contango, though Aug-Sep narrowed very marginally, while Sep-3m drifted wider by another US¢6 per day. Forward rates had tightened markedly on Thursday, though Friday they slipped again, losing $0.50-$1.00/mth into 2011. There was however still no change in the LME’s WC report, with two parties each with positions equal to 30-40% of all non-cancelled stock.