SMM Morning Review - 2010/6/28 Aluminum Market

SHANGHAI, June 28 (SMM) -- LME base metals prices closed with gains last Friday (June 25th) led by LME copper prices. LME aluminum prices opened at USD 1,960/mt, with the highest level and the lowest level at USD 2,006/mt and USD 1,948.25/mt, respectively, and finally ended at USD 1,998/mt, up USD 33/mt compared with the previous trading day, or up 1.68%. Total trading volumes reported 125,748 lots, and total positions were 749,047 lots, up 820 lots. LME aluminum inventories declined by 6,975 mt to 4,446,400 mt.

The US government announced last Friday that the US industrial production in May rose by 1.3% after revision of a rise of 1.2%, and the US's GDP in 1Q increased by 2.7%, lower than both the estimated and the initial levels of 3.0%. Sources report that House and Senate conferees thrashed out a final version of the most significant new financial reforms, with key points including setting up a consumer protection bureau, providing housing loan help for the unemployed, and setting up an early-warning system for financial groups deemed too big to fail. The establishment of financial reform bill, better-than-expected economic data, as well as continuous declines in LME aluminum inventories all helped offset the pessimism caused by the Federal Reserve's subdued assessment of the economy and boosted investor confidence in economic recovery, and the US stocks reversed previous losses last Friday as a result. However, the European stock markets closed with declines due to drops in automobile stocks and BP's share prices.

LME base metals prices closed with gains last Friday, and SHFE aluminum prices are expected to open high today, with prices expected to fluctuating at high levels. However, SHFE 1009 aluminum contract prices will face heavy pressure at the RMB 15,000/mt mark, and domestic financial market trends will likely affect the upward momentum in SHFE 1009 aluminum contract prices, and SMM predicts SHFE 1009 aluminum contract prices will test the resistance level of RMB 15,000/mt today.     

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

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