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SMM Morning Review - 2010/7/13 Aluminum Market
Jul 13,2010 10:23CST
smm insight

SHANGHAI, July 13 (SMM) -- LME base metals prices closed with declines yesterday. LME aluminum prices opened at USD 2,002/mt, with the highest level and the lowest level at USD 2,004.25/mt and USD 1,970/mt, respectively, and finally ended at USD 1,971/mt, down USD 34/mt compared with the previous trading day, or down 1.7%. Total trading volumes reported 129,950 lots, and total positions were 754,097 lots, down 2,251 lots. LME aluminum inventories declined by 8,075 mt to 4,389,925 mt.

Market players predict the corporate earnings for 2Q will help support stock markets, but the European debt crisis and the US economic recovery remain unclear, so investors adopted a cautious attitude before the start of the earnings season. In this context, the European and the US stock markets only rose slightly yesterday. The preliminary data released by China Customs on July 10th show that China's imports of copper and aluminum in June experienced a year-on-year declines, causing investors to exit from the market. In addition, the US dollar index strengthened for two consecutive days, weighing down base metals prices. LME aluminum prices remained relatively stable over recent four week in view of huge aluminum inventories, the start of seasonal low demand period, and supply surplus. LME aluminum inventories plummeted by over 8 kt last night, still failing to boost expectations of aluminum demand. 

SHFE aluminum prices plunged at closing yesterday, and SMM predicts SHFE aluminum prices will test the support at RMB 14,750/mt today after opening lower. Special attention should be paid to the US dollar index trends and whether or not China's stock markets can extend the rebound today, and SMM predicts SHFE 1009 aluminum contract prices will fluctuate between RMB 14,700-14,850/mt today.     

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


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