MI Comment: Aluminium extends falls as LME Week starts

Activity barely improved after we signed off on Friday, with aluminium extending the premarket's 2437-2420 trading range at both ends, though not by far. The day's biggest event was the release of the eagerly-anticipated US non-farm payroll data, which came in better than expected and contained a positive revision to August's figures. The news saw the dollar spike higher and the base metals complex drop momentarily, though both currency and commodity markets quickly returned to pre-release levels. The light metal bottomed at 2415, then rebounded to 2440, ending the session only little-changed. Nearby contangos narrowed marginally throughout C-3m, as did rates in 2009, though elsewhere in the forwards all was unchanged. Dec 2011 outright was unchanged at 2525 (2526). Trading resumed on Monday at 2435, though after an overnight (Fri/Mon) high of 2439 prices slumped all the way to 2390, following copper and others down while precious metals were also off Friday's highs. Chinese would-be buyers of copper anecdotally recoiled as they were greeted with prices vastly inflated during their week's absence, while sellers in London found reduced liquidity at the start of the LME Week shindig. 2,700 lots of aluminium had changed hands via Select at time of writing, with prices hovering c. 2400 currently. Cliff Green Consultancy eyes last month's dual lows c. 2375 for support, with a decisive break below 2370 signalling falls towards 2320/30, they wrote.