MI Comment: Aluminium nudges resistance as Q3 expires

In a move that looked designed to run (short) stops, aluminium gained more ground on Wednesday, briefly passing the previous week's high of 2515 before sliding back after further macroeconomic gloom from the US. As we signed off yesterday the market had picked up from 2458 to 2484 on light turnover, with more stock landings not having any impact. The morning sessions then saw a burst of buying up to 2502, with copper also advancing beyond the $8000 mark. As traders in the US rejoined, prices ran to the high of the day over lunch, peaking at 2519.75. At that point US durable goods data for August exceeded traders' worst expectations, falling by the greatest margin in 7 months. In tandem with copper the light metal fell all the way to 2462 before the closing bell, posting only a narrow gain on the day. Forward spreads that had been better bid during the day were hastily adjusted in the closing stages of the afternoon, ending marginally tighter from Tuesday with narrower contangos in 2008. 3m-Dec2011 ended at 30.00b (6.00b). The surprise of Thursday was a net drop in LME stocks, to the tune of 1,100t, while the cancelled warrant tally also grew. The tonnage drawn was insignificant, though the headline probably aided those looking to force aluminium higher as the quarter's end approaches tomorrow. Prices had kicked off at 2470 in Asia and lifted from there to 2516.50,with copper also making gains. Volumes via Select were respectable at 2,200 lots. In their latest daily report Cliff Green Consultancy continued to look for "slightly higher levels" to sell into, with a breach of resistance c. 2520 likely to extend 'short term' gains towards 2580/90, they wrote. Last at 2508.