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SMM Morning Review - 2010/7/9 Aluminum Market
Jul 9,2010 10:11CST
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SHANGHAI, July 9 (SMM) -- LME aluminum prices opened slightly higher at USD 2,000/mt, and later surged to the daily high of USD 2,017/mt, but then slipped rapidly to the daily low of USD 1,984/mt, and finally prices ended at USD 1,990/mt, up USD 3/mt compared with the previous trading day, or up 0.15%. Total trading volumes reported 124,261 lots, and total positions were 749,282 lots, up 8,532 lots. LME aluminum inventories declined again by 5,675 mt to 4,403,875 mt.

Recent positive technical indicators and economic news seem to gradually offset the selling pressure faced by global stock markets. The US Department of Labor announced on Thursday that the US initial claims for jobless benefits were 454,000 last week, lower than 475,000 a week earlier, and also slightly lower than the estimated level of 460,000. The signs the labor market will improve effectively boosted market confidence, and Dow Jones Industrial Average again posted a growth of over 100 points, and finally closed at 10,138.99 points as a result, but whether or not the US stocks can remain on an upward track will depend on further improvement in labor market and manufacturing sector.

Sources report that the results of stress tests on European banks are partly believed to be positive, helping push up the European stocks by 1%, and the euro strengthened to a two-month high of 1.27 against the US dollar. Positive economic conditions helped push up base metals prices, but LME aluminum prices were under the pressure of USD 2,000/mt, and are expected to continue to struggle at the USD 2,000/mt mark in the short term if economic development and market demand report no significant improvement.

SHFE aluminum prices lacked upward momentum recently, and SHFE 1009 aluminum contract prices were facing strong pressure at RMB 15,000/mt. Special attention should be paid to whether or not spot market performance during the weekend can boost SHFE aluminum prices. Meanwhile, whether or not the rebound in domestic stock markets can be sustainable remains unknown.

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


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