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SMM Morning Review - 2010/1/20 Aluminum Market
Jan 20,2010 11:28CST
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SHANGHAI, Jan. 20 (SMM) -- Yesterday, LME aluminum prices opened at USD 2,315/mt, with highest and lowest level at USD 2,329/mt and USD 2,262/mt, respectively, and finally prices ended at USD 2,309/mt.  Total trading volumes reported 9,903 lots, and positions were 718,199 lots. LME aluminum inventories increased by 43,875 mt to 4,623,175 mt.

Yesterday, negative news including net loss posted by the Citigroup and unfavorable credit rating of Greece helped push up market demand for risk-avoidance of the US dollar, and the US dollar index advanced to 77.5 in response, exerting downward pressure on base metals prices. LME aluminum inventories experienced the largest growth rate within 5 months, and although market players showed no special response to high aluminum inventories, the rapid growth in LME aluminum inventories still generated investor concerns over future aluminum consumption. LME aluminum prices closed down, testing again the support level of USD 2,260/mt, and LME aluminum prices did not fall below this level, suggesting aluminum prices will likely fluctuate higher in the future.

SMM predicts SHFE 1004 aluminum contract will fluctuate today, with prices expected to move in the RMB 17,600-17,850/mt range. The low-end SHFE aluminum prices may climb gradually, but the previous strong upward momentum in aluminum prices will not likely appear again. Recently, LME aluminum prices lacked upward momentum, while SHFE aluminum prices were also gaining upward momentum. 


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