SHANGHAI, Jan. 4 (SMM) -- Last Thursday, LME aluminum prices opened at USD 2,255/mt, with highest and lowest level at USD 2,274/mt and USD 2,224/mt, respectively, and finally prices ended at USD 2,245/mt.  Total trading volumes reported 4,272 lots, and positions were 686,333 lots. LME aluminum inventories increased by 475 mt to 4,628,900 mt.

The US Department of Labor announced on December 26th that the number of initial application for unemployment benefits dropped to 432,000 during that week, lower than prediction of 460,000, boosting market confidence in economic recovery. The US stock markets showed weak performance, with trading sentiment lackluster near the end of 2009, and with closing prices down 1% on Thursday. On the contrary, LME futures market showed strong performance, with LME copper prices standing above USD 7,400/mt, and with strong long sentiment. Although SHFE aluminum prices advanced further on Thursday, moving higher following other base metals prices, LME aluminum inventories were high, leaving weak market fundamentals, so LME aluminum prices showed a weaker movement after the Christmas holiday, with signs of fluctuating lower.

Recently, medium and long sentiment remained strong in domestic market, and SMM predicts SHFE aluminum prices will continue to move higher today, and LME aluminum prices may move higher as well driven up by continuously strong long sentiment in China, which will in turn help support domestic aluminum prices to rise. SMM predicts SHFE 1004 aluminum contract will move in the RMB 17,250-17,500/mt range today.

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