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SMM Morning Review - 2010/5/4 Aluminum Market
May 4,2010 10:03CST
smm insight

SHANGHAI, May 4 (SMM) -- LME market was closed yesterday. Last Friday (April 30th), LME aluminum prices opened at USD 2,225/mt, with the highest level and the lowest level at USD 2,266.5/mt and USD 2,206/mt, respectively, and finally prices ended at USD 2,255/mt, up USD 54/mt, or up 2.45%, and LME aluminum prices have rebounded for three consecutive trading days after a significant drop of 7%. Total trading volumes reported 177,204 lots, and total positions were 718,687 lots, down 3,129 lots. LME aluminum inventories declined by 6,250 mt to 4,535,450 mt.

Greece will obtain a total of EUR 110 billion of loan from the Euro zone, helping ease market concerns over Greece's sovereign debt crisis. However, investors were still concerned above the debt crisis in other Euro zone members including Portugal, Italy, Ireland, and Spain, so the US dollar index remained strong and moved above 82. In addition, China's Central Bank announced to raise the deposit reserve requirement ratio by 50 basis points, improving market expectations with regard to China's monetary policy tightening. Base metals prices continued to fluctuate in response, and LME aluminum prices remained strong supported by rising crude oil prices to USD 86/bbl. 
SMM predicts SHFE aluminum prices will open low today negatively affected by China's move to raise the deposit reserve requirement ratio, but any downward room for aluminum prices will be limited due to strong LME aluminum prices and the fact that aluminum prices have approached cost levels. SMM predicts SHFE 1007 aluminum contract prices will move between RMB 16,000-16,300/mt.    

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


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