SHANGHAI, June 24 (SMM) -- LME base metals prices closed with declines last night (June 23rd). LME aluminum prices opened at USD 1,950/mt, with the highest level and lowest level at USD 1,970/mt and USD 1,931/mt, respectively, and finally prices ended at USD 1,941/mt, down USD 18/mt compared with the previous trading day, or down 0.92%. Trading volumes were 89,833 lots, while positions were 748,641 lots, up 1,176 lots. LME aluminum inventories surged unexpectedly by 6,325 mt to 4,463,675 mt.
The US Department of Commerce announced on Wednesday that US new home sales in May plunged by 32.7% to an annual rate of 300,000 compared with April levels, much lower than the estimate of 410,000, while new home sales in April were revised the initial rate of 504,000 to an annual rate of 446,000. The lower-than-expected housing data was due mainly to the expiration of the US government incentives for new home buyers at the end of April, but new home sales setting a 40-year low also reflects the significantly profound effect from previous government stimulus policies, and market players generally believe the economic growth has shown signs of slowing after removing policy factors.
In other news, the US Federal Open Market Committee announced to maintain the federal funds rate at 0 to 0.25%, and said the economic recovery is proceeding and that the labor market is improving gradually. However, the Fed also said housing starts remain at a depressed level. Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad which hint the European sovereign debt crisis. The US dollar index slid as the euro rebounded in response to plunged new home sales in the US, but the slipping US dollar index failed to push up base metals prices, and market players still concern that the negative economic data will directly affect future demand for base metals. LME aluminum prices still swung around USD 1,950/mt.
SHFE aluminum prices closed with slight gains yesterday. Aluminum producers' unwillingness to move goods is expected to slightly push up domestic aluminum prices in spot markets today, but financial market movements still serve as the major factor behind aluminum price trends, and special attention should be paid to the US dollar index trends and domestic stock market movements today.
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