SHANGHAI, Feb. 1 (SMM) -- Last Friday, LME aluminum prices opened at USD2,101/mt, with the highest level and lowest level at USD 2,118/mt and USD 2,070/mt, respectively, and finally prices ended at USD 2,091/mt. Total trading volumes reported 15,002 lots, and positions were 695,568 lots. LME aluminum inventories declined by 7,225 mt to 4,611,975 mt.

Last Friday, the US Department of Commerce announced that the US GDP in 4Q 2009 rose by 5.7%, higher than analyst prediction. Last Friday, the Senate confirmed Bernanke for second term as Federal Reserve chairman, and the US dollar index advanced to near 79.5 pushed up by rising demand for risk-avoidance, positive economic data in the US, as well as the expectations that Bernanke's confirmation for second term will help accelerate the economic recovery. As a result, base metals prices were weighed down further.

LME aluminum prices fell below 60-day moving average line easily, and the lack of upward momentum will remain in the near term. However, the US dollar index faced stronger pressure when approaching 80, and base metals prices have undergone corrections recently, so the long sentiment of base metals will likely recover for the foreseeable future, showing resistance to previous strong short sentiment. SMM predicts SHFE 1005 aluminum contract prices will move in the RMB 16,000-16,400/mt range today.

To contact the writer on this report: angelawang@smm.cn

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