LIVE FUTURES REPORT 05/10: LME Al price continues climb on market tightness; other base metals hit by stronger dollar

The three-month aluminium price pushed closer toward $2,200 per tonne, it continues to be supported by tight fundamentals and low stock levels.

The temporary closure of Norsk Hydro’s Alunorte alumina refinery in Brazil caused the LME price to rally over 4% earlier this week, and continues to push raw materials prices higher.

“Aluminium remains in the spot light and with the alumina shortage, the outright price will stay in a strong position,” an aluminium trader said.

LME on-warrant stocks now sit at 605,650 tonnes – a low not seen since 2005.

The other base metals were on a downward trend as the dollar index continued to strengthen.

Statements from US Federal Reserve Chair Jerome Powell on Thursday that implied more US interest rate increases were coming, strengthened the dollar and put downward pressure on base metals prices.

Copper prices dropped over $100 per tonne and were back below the $6,200-per-tonne support level, despite stocks being at increasingly lower levels.

There is more copper stock cancelled in LME warehouses now than available on-warrant – with 56% of stock booked for removal.

“Trading volumes are somewhat weak, reflecting a lack of investor interest in copper, which is most likely due to the Golden Week in China (October 1-7),” Boris Mikanikrezai, Fastmarkets MB analyst said.

The other base metals edged lower but remained near Thursday’s closing prices, with investors likely awaiting further direction from key US jobs data, which will be released later this afternoon.

“Today’s economic data has the US employment and payroll numbers, which will most likely determine the end of our week, has hands hovering once again over the panic button,” Malcom Freeman, Kingdom Future said.

Base metals prices

• The three-month copper price was down $101 per tonne to $6,189 per tonne. Stocks fell 2,150 tonnes to 186,800 tonnes.
• Aluminium’s three-month price was up $18.50 per tonne to $2,188 per tonne. Inventories declined 7,175 tonnes to 966,900 tonnes.
• The three-month nickel price was down $45 per tonne to $12,445 per tonne. Stocks dipped 288 tonnes to 227,802 tonnes.
• Zinc’s three-month price was down $39 per tonne to $2,615 per tonne. Inventories fell 2,075 tonnes to 201,600 tonnes.
• The three-month lead price was most recently trading at $1,998 per tonne, a decline of $8 per tonne. Stocks were down 325 tonnes to 114,275 tonnes.
• Tin’s three-month price dropped $20 per tonne to $18,955 per tonne. Stocks dipped 10 tonnes to 3,145 tonnes.

Currency moves and data releases

• The dollar index was up 0.09% to 95.83.
• In other commodities, the Brent crude oil spot price was at $84.75 per barrel, a decline of 0.14%.
• In European data on Friday, Germany will report on its factory orders and producer price index, France will publish data on its government budget balance, Italy will release retail sales data, and the UK’s Halifax Bank of Scotland will publish its house price index.
• In US releases later, average hourly earnings, non-farm employment change, unemployment rate, and trade balance are due.