MI Comment: Aluminium idles while dealers sleep

Crude oil clipped new highs of $80/bbl on Wednesday as the poor old greenback slid to new lows versus the euro, though aluminium stayed within recent bounds. By the time we signed off yesterday prices had slid back from early highs at 2463 to 2431 in moderate turnover, having half-heartedly tracked copper higher the previous afternoon. Locals again noted good consumer support in the 2430 area and critical nearby support at 2400 was never threatened, with a low print at 2428 in the early afternoon. The only notable spread movement was a narrowing by up to $3.50/mth in H2 2011, with rates elsewhere easier by up to $1.00/mth in places. Thursday morning required a quick call to our broker sources to check that LME data was coming through okay, with aluminium's turnover via Select yet to reach 500 lots at time of writing. All was fine, we were assured, though activity had ground to a halt ("dealers are all asleep"). Prices had nudged highs of 2445 before London reopened and drifted from there to 2427 with LME stocks up another 4,000t. Corrective action towards 2500/10 was yet a possibility, Cliff Green Consultancy wrote in their latest update, though underlying studies remained ‘decisively bearish', they concluded.