By the time we signed off on Monday aluminium had picked up from 2505 to 2530, largely on the back of fresh dollar weakness versus the euro, while oil and precious metals were also flying high. Volumes were unconvincing, however, as the market approached technical resistance in the 2530/40 area and prices traded no higher than 2537. Selling from producers and chart-oriented traders kept the market in check and as US equities later slid on further weak banking results due to the sub-prime mortgage debacle, the whole base complex was marked down. The likes of Cliff Green Consultancy had suggested that a failure to break up was likely to bring renewed bouts of weakness and in thin conditions values tumbled to 2475 in the pm sessions.
Having tightened up on Friday the forward structure slipped somewhat on Monday as rates relaxed $0.50-$1.00/mth in places, with the narrow backwardation in H2 2009 evaporating. Only in 2011 did spreads gain $0.50/mth here and there, rating 3m-Dec 2011 at 2.00c (5.00c), or 2495 outright (2510).
Volumes weren't much better on Tuesday morning as prices moved loosely between 2507-2476, dipping lower after
LME stocks fell by a net 650t. A surging yen/dollar, but weaker euro/dollar provided some extra two-way interest, though no more than 1,200 lots had changed hands via Select at time of writing.
Technically resistance at 2530/40 could yet be retested, according to CGC's latest update, though a failure to break higher would bring support c. 2370/80 back into focus, they wrote. Last at 2485.
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