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SMM Morning Review - 2010/5/17 Aluminum Market
May 17,2010 10:54CST
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SHANGHAI, May 17 (SMM) -- Market concerns over the debt crisis in Euro zone re-emerged, and the US dollar strengthened as a result, and base metals prices plunged in response. LME aluminum prices opened at USD 2,163/mt, with the highest level and the lowest level at USD 2,165/mt and USD 2,093/mt, respectively, and finally prices ended at USD 2,101/mt, down USD 69/mt compared with the previous trading day, or down 3.18%. Total trading volumes reported 151,194 lots, and total positions were 736,389 lots, down 13,575 lots. LME aluminum inventories continued to decline by 3,725 mt to 4,478,750 mt.

Foreign media reported that the French President Nicolas Sarkozy threatened to withdraw France from the Euro zone on the closed-door meeting if Germany refused to bail out Greece. Although this report was denied later, market concerns over the development prospect of the Euro zone grew, causing the euro to slide below the previous support level of 1.25 to 1.23, a one-year low, and the US dollar index advanced to above 86 in response.

Global stock markets declined as well last Friday, and Dow Jones Industrial Average closed at 10620.16, down 162.34 or 1.51%; Nasdaq Composite Index closed at 2346.85, down 47.51 or 1.98%; UK FTSE 100 index fell by 170.88 or 3.14% to 5262.85; the German DAX 30 index closed at 6056.71, down 195.26 or 3.12%; France CAC-40 index closed at 3560.36, down 171.18 or 4.59%. The soaring US stock index directly depressed LME base metals prices, and LME aluminum prices moved strongly supported by positive market fundamentals and higher purchases at lower prices, with prices standing above USD 2,100/mt before closing.
SHFE aluminum prices opened lower today following other base metals, with SHFE 1007 aluminum contract prices testing the previous low of RMB 15,500/mt, and SMM predicts SHFE 1007 aluminum contract prices will move between RMB 15,400-15,700/mt today, and today is the last trading day of SHFE 1005 aluminum contract.     

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


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