SHANGHAI, Oct. 27 (SMM) -- LME aluminum prices opened at USD 1,969/mt yesterday, and later continued to climb supported by positive performance of China’s futures market, and then broke through USD 2,000/mt to hit the daily high of USD 2,028/mt stimulated by rising US stocks. However, the US dollar index rebounded significantly to 76.12 points negatively affected by plunged US stocks, which exerted heavy downward pressure on base metal prices. In this context, LME aluminum prices dropped to USD 1,970/mt, and closed at USD 1,983/mt finally.
Since last night market players were concerned that the tax preference provided by the Government for home-buyers was coming to an end, coupled with market speculation that the US government may require US banks to raise more capital, resulting in sell-offs of stocks of banks and builders, and the US stocks plunged as a result. The interest in risk avoidance propelled the US dollar index to rebound. Meanwhile, the US dollar has been in oversold position recently, resulting in significant growth in the US dollar index, and base metal prices were dampened heavily last night.
The US dollar index is expected to re-enter the downward track after rebounds to 76 points, and metal prices will have upward momentum after reasonable reductions, so SHFE aluminum prices are expected to move in the RMB 15,000-15,250/mt range today.
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