Metals News
SMM Morning Review - 2010/7/7 Aluminum Market
smm insight
Jul 7,2010

SHANGHAI, July 7 (SMM) -- LME base metals prices edged higher yesterday stimulated by strengthening China's stock markets, with LME aluminum prices experiencing significant growth. LME aluminum prices opened at the daily low of USD 1,935/mt, and later climbed gradually to the daily high of USD 2,007/mt, but finally closed at USD 1,997/mt, up USD 60/mt compared with the previous trading day, or up 3.1%. Total trading volumes reported 119,299 lots, and total positions were 758,833 lots, down 414 lots. LME aluminum inventories declined by 5,925 mt to 4,404,850 mt.

China's stock markets strengthened on Tuesday (July 6th) led by rebounding banking and property shares, with the Shanghai Composite Index climbing by 1.92% and the Shenzhen Stock Index gaining by 2.09%, boosting global investor confidence. Most indexes strengthened last night, and commodities prices closed with gains as well. However, US markets were bearish due to weaker-than-expected non-manufacturing index in June, with the Dow Jones Industrial Average trimming some gains at closing after surging by over 170 points previously. Meanwhile, the weaker-than-expected non-manufacturing index also sent the US dollar to a 6-week low versus the euro and to a 7-month low versus the Japanese yen, and the US dollar index slipped to 84.07 in response, setting a multi-week low, which helped push up LME aluminum prices further.

SHFE aluminum prices have been near the 30-day moving average, and are expected to break through the resistance level of 30-day moving average for the first time over three months in view of moderate market sentiment, upbeat other base metals prices, and strengthening stock markets, and SHFE 1009 aluminum contract prices are expected to test the RMB 15,000/mt mark.   

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