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SMM Morning Review - 2010/7/1 Aluminum Market
Jul 1,2010 10:22CST
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SHANGHAI, July 1 (SMM) -- Yesterday, LME aluminum prices opened at USD 1,951/mt, with the highest level and the lowest level at USD 1,982/mt and USD 1,920/mt, respectively, and finally ended at USD 1,978/mt, up USD 31/mt compared with the previous trading day, or up 1.59%. Total trading volumes reported 158,507 lots, and total positions were 748,298 lots, up 2,500 lots. LME aluminum inventories declined by 5,475 mt to 4,428,075 mt.

The US Institute for Supply Management (ISM) announced on Wednesday (June 30th) that Chicago Purchasing Managers Index (PMI) in June was 59.1, higher than the estimated level of 59.0, but lower than May levels of 59.7. The employment data released by the US government was also negative, increasing market fears. The lenders asked the European Central Bank for EUR 131.9 billion (USD 161.4 billion) of three-month loans, lower than market prediction of EUR 210 billion. In other news, Moody's Investors Service placed Spain's credit rating on review for a possible downgrade.

Concerns over the liquidity in European banking sector and European debt crisis undermined market confidence, and the European and the US stock markets were sluggish yesterday as a result. Although the US dollar index recovered to above 86 after experiencing declines, the significant declines in LME aluminum inventories helped boost LME aluminum prices, with prices reversing some losses recorded on Tuesday. 

SMM predicts SHFE 1009 aluminum contract prices will move narrowly at current levels, with prices expected to move between RMB 14,600-14,750/mt.   
To contact the writer on this report: ericzhang@smm.cn


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