SHANGHAI, Jan. 12 (SMM) -- SHFE aluminum prices opened high and went higher, and fluctuated above daily moving average, but climbed rapidly before closing, with prices ending at RMB 18,270/mt, up nearly 4%. Positions of SHFE three-month aluminum contract increased by 17,942 lots to 163,544 lots, exceeding positions of SHFE three-month copper contract and SHFE three-month zinc contract, and SHFE three-month contract aluminum prices headed for RMB 18,500/mt. Positions of SHFE 1005 aluminum contract increased by 15,466 lots, and purchasing sentiment was brisk, an indication of large amounts of speculative funds. SHFE spot-month contract aluminum prices have stood above RMB 17,550/mt, heading for RMB 18,000/mt.

In the aluminum spot market, CHALCO raised alumina ex-works prices from RMB 2,800/mt to RMB 3,000/mt again yesterday, helping increase aluminum costs further, another indication of supply shortages of alumina. Yesterday, spot discounts remained at RMB 100/mt, with traded prices moving in the RMB 17,280-17,350/mt range. Although CHALCO did not move goods at higher prices, cargo-holders held higher interest in selling goods at RMB 17,300/mt. Downstream consumers increased purchase volumes gradually after aluminum prices were on an upward track, but a limited number of traders were unwilling to move goods due to their optimistic market outlook, and spot aluminum prices will soar to RMB 17,500/mt in the short term as a result.

Special attention should be paid to whether or not recent heavy snowfalls will further tighten supply of coal and electric power, as well as limit transportation capacity.

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