Copper, steel and zinc have been taking the lead as January kicks off with a decent rally. Now it is probably time for Shanghai aluminium to catch up (where we look at rolling three-month forward futures contracts). The retreat from November’s surge has eased the overbought situation, yet momentum has remained bullish since then. We have drawn in the mean regression from the low in late 2015 showing how the one standard deviation line below the mean has provided support on the way up. This week, it appears to have done so again. Volume has picked up a little and open interest remains steady. Expect a rally to the mean and then through it to the upper standard deviation line.
