Last week the markets had a lot of news to digest and that led to a choppy reboundin prices. Aluminium, along with many other base metals, started to move higheron Tuesday on the back of reports that Chinese producers had asked the CNIA to lobbyBeijing to buy 900,000 tonnes of aluminium. The subsequent rallies were then given afurther boost by reports that producers had asked regulators to investigate “maliciousshort-selling” on the SHFE, which sparked short-covering by funds. By Friday, thealuminium price had rebounded to Rmb 10,405/tonne and LME three-month priceshad rallied to $1,528/tonne from a low of $1,435.50/tonne on November 23. It remains tobe seen whether the Chinese government does step in to buy aluminium, or does start aprobe into the allegation of short-selling (which could lead to shorts being closed and aban on speculative shorting), but for now shorts are likely to remain nervous.
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