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The National Association of Realtors (NAR) released on Monday that the existing home sales in December 2009 fell by 16.7% to an annual rate of 5.45 million, lower than analysts' predictions, experiencing the largest drop, and exerting heavier pressure on the market. Currently, market players were measuring the economic recovery in 2009, but the tightening policies and the falling stock markets generated investor concerns over the previous optimistic expectations with regard to economic recovery, since investors were willing to see the improvement in actual market fundamentals. However, any signs of demand recovery have not been shown in China at the year end.
The wait-and-see sentiment will persist in the futures market. Although the market supply will be tightening due to colder weather, and aluminum prices also fell at a slower pace, the lack of strong optimistic sentiment left high possibility that aluminum prices will continue to fluctuate. In the context, SMM predicts SHFE 1005 aluminum contract will move in the RMB 17,300-17,500/mt range today.
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