LONDON, July 17 (Reuters) - Aluminium prices rose further
from three-month lows on Tuesday as traders were forced to
abandon short positions by the high cost of rolling them
forward.
Benchmark aluminium on the London Metal Exchange
traded up 0.5 percent at $2,065 a tonne in official rings after
touching $2,021.50 on Friday, the lowest since April 6.
The LME's July monthly contract expires on Wednesday and the
cost of rolling a position to August was $53 per contract after
surging to $68 on Monday.
"There's been an almighty squeeze," said ING analyst Oliver
Nugent.
Investors who had borrowed aluminium to bet on lower prices
were likely to have shied away from the cost of rolling those
bets forward and instead bought out their positions, boosting
prices, he said.
But the gains were likely to be short-lived, he added, with
investors unwilling to pile in until it is clear whether the
United States will ease sanctions on Russia's Rusal.
Rusal is the largest aluminium producer outside China and
the sanctions, imposed in April, disrupt its access to global
markets.
ALUMINIUM SPREADS: Alongside the high cost of the
July-August roll, the premium of cash aluminium over the 3-month
contract soared this week to $51.50, close to April's 11-year
high of $52, before settling back to $42.75.
STOCKS: Some investors have delivered metal to settle short
positions. On-warrant aluminium stocks in LME-registered
warehouses rose by 28,350 tonnes to 1,004,925 tonnes, the first
time they have been over the 1 million mark since April and up
from around 886,000 tonnes a month ago. MALSTX-TOTAL
TECHNICALS: Aluminium faced technical resistance at a
downtrend line and Monday's high, both around $2,075, brokers
Marex Spectron said.
CHINA ECONOMY: China's state planning agency said a 2018
economic growth target of around 6.5 percent could be achieved,
a day after data showed slightly slower growth for the second
quarter and the weakest expansion in factory activity in two
years in June. Weaker growth in China, the largest consumer of
metals, would push prices lower.
OTHER METALS: LME copper did not trade but was bid
down 0.3 percent at $6,175 a tonne, zinc traded 1.9
percent higher at $2,522 a tonne, lead was bid up 0.3
percent at $2,182 a tonne, tin traded 0.5 percent lower
at $19,405 a tonne and nickel was bid down 0.9 percent
at $13,550 a tonne.
