SMM Morning Review - 2010/4/27 Aluminum Market

SHANGHAI, Apr. 27 (SMM) -- Yesterday, LME base metals prices continued to fluctuate slightly. LME aluminum prices opened at USD 2,349.5/mt, with the highest level and the lowest level at USD 2,360/mt and USD 2,310/mt, respectively, and finally prices ended at USD 2,317/mt, down USD 18/mt compared with the previous trading day. Total trading volumes reported 140,093 lots, and total positions were 715,833 lots, down 779 lots. LME aluminum inventories declined by 9,000 mt to 4.558 million mt.

No additional news were released yesterday, but the Federal Reserve will hold a two-day monetary policy meeting from Wednesday, with the number of claims for jobless benefits, consumer confidence index, and GDP report expected to be released. German Chancellor Angela Merkel told the reporter in Berlin that she won't release funds for Greece until the country shows it's got a "sustainable, credible" plan to cut its budget deficit, and she also said Germany would assist Greece only after the government in Athens agrees to take "tough" measures in the coming several years. Meanwhile, investors began to worry about the debt problems in other Euro zone members, such as Portugal. The euro dipped as a result, but Bundesbank President Axel Weber said the euro doesn't have a "credibility" issue, helping boost euro trends, and the US dollar index kept moving around 81.2. LME aluminum inventories declined significantly, but market became less sensitive to any changes in aluminum inventories, so LME aluminum prices posted the weakest performance among base metals yesterday.
 
SMM predicts SHFE three-month aluminum contract prices will remain steady at the previous support level of RMB 16,500/mt today, with prices expected to move between RMB 16,500-16,700/mt, and will struggle to stand above 5-day moving average if other base metals and financial markets lend support.    

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

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