SHANGHAI, Jan. 26 (SMM) –About 71% of the 32 Chinese aluminum smelters surveyed by SMM see aluminum prices stabilize this week.
See SMM forecast, please click: LME Aluminum to Consolidate Next Week
These market players expect SHFE 1603 aluminum to consolidate between RMB 10,600-10,800/mt and LME aluminum to range USD 1,470-1,490/mt. Falling aluminum stocks in China will offer support to prices. But entry of smelters at highs for hedging purpose will put downward pressure on prices.
Another 13% bearish that LME aluminum will fall below USD 1,470/mt and that SHFE 1603 aluminum will drop below RMB 10,600/mt, citing a series of negative factors: 1. Consumption will soften as more processors complete stocking for the 2016 Chinese New Year holiday in early February; 2. The 20-day moving average of SHFE aluminum is pointing downward, and SHFE aluminum will be vulnerable to short selling; 3. The US dollar will stay firm on high expectations for US rate hike.
The rest 16% are bullish that LME aluminum will rise above USD 1,490/mt and SHFE 1603 aluminum will climb above RMB 10,800/mt, citing production cuts and falling aluminum stocks in China’s major trading markets.