MI Comment: Sluggish aluminium finds buyers lower down

Aluminium was the laggard of the bunch on Tuesday, slipping from an early high at 2775 to 2745 over the course of a subdued day, while the rest of the LME complex made further gains. Overhead resistance was ample in the shape of the 200- and 30-day moving averages c. 2770, while the 100- and 10-day MAs were expected to generate stronger selling interest c. 2790. In the event, aluminium was a damp squib as July expired ahead of August’s options declarations today. Nearby spreads were essentially unchanged, forward backwardations were a fraction easier here and there and the LME’s WC warrant banding report remained empty. On Wednesday morning the proceedings were again dominated by further fallout from the US subprime mortgage saga, rippling out through the hedge fund community and heightening fears of a real credit crunch. Copper had pulled back from 8000, while aluminium fell from opening highs at 2749.50 to 2720, whereabouts technical support still lay, according to Cliff Green Consultancy. Despite prices remaining within recent parameters two-way interest was strong, with LME Select having clicked over 3,000 lots at time of writing. As we signed off, values had perked up to 2730, with consumer interest remaining healthy at lower levels.