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SMM Morning Review - 2010/6/25 Aluminum Market
Jun 25,2010 10:12CST
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SHANGHAI, June 25 (SMM) -- LME base metals prices closed with gains on Thursday (June 24th). LME aluminum prices opened at USD 1,940.5/mt, with the highest level and lowest level at USD 1,973.5/mt and USD 1,933/mt, respectively, and finally prices ended at USD 1,965/mt Trading volumes were 101,455 lots, while positions were 748,227 lots, down 414 lots. LME aluminum inventories declined by 10,300 mt to 4,453,375 mt. 

The US durable goods orders in May declined by 1.1%, with the estimate of a drop of 1.4%. The US initial claims for jobless benefits dropped to 457,000 in the week ended June 19th, with the estimate of 460,000. Japan's output of rolled copper in May was 72,627 mt, up 50.4% YoY, and up 2.7% MoM. Although most economic data were better than expected, the US Federal Open Market Committee remains cautious about the economic development. Meanwhile, the economic data released on Thursday showed an unclear trend, and investors remain concerned about the slowing pace of economic recovery, so the stock markets in Europe and the US closed with declines yesterday. Continuous declines in LME aluminum inventories show a sign of stronger demand, and base metals prices in China strengthened yesterday, both allowing commodity markets to close with gains.

China's currency move pushed up domestic futures market, and SHFE 1009 aluminum contract prices were near the RMB 15,000/mt mark. Although aluminum producers’ unwillingness to move goods result in supply tightness in north China spot market, any further increases and upward momentum in aluminum prices will be limited given no substantial changes in aluminum market fundamentals, and SMM predicts SHFE 1009 aluminum contract prices will move narrowly between RMB 14,850-15,000/mt today.    

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


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