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SMM Morning Review - 2010/7/20 Aluminum Market
Jul 20,2010 10:11CST
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SHANGHAI, July 20 (SMM) -- LME aluminum prices opened at USD 1,975/mt, with the highest level and the lowest level at USD 1,992/mt and USD 1,962/mt, respectively, and finally ended at USD 1,972/mt, down USD 7/mt compared with the previous trading day, or down 0.35%. Total trading volumes reported 276,356 lots, and total positions were 754,584 lots, up 1,088 lots. LME aluminum inventories returned to the downward track after two-day growth, down 6,325 mt, to 4,368,825 mt.

According to the US corporate earnings already released so far, approximately 75% of enterprises reported stronger profits than analysts' expectations, and about 71% of enterprises reported higher-than-expected operating revenues. The stronger-than-expected corporate earnings helped push up the US stocks. However, the US labor markets, housing reports, and consumer spending were negative, eroding some gains in the US stocks, with Dow Jones Industrial Average rising slightly. In this context, investors adopted a wait-and-see attitude. Moody's cut Ireland's credit rating on Monday, but later changed its outlook to stable from negative, a signal of no further downgrades, so any hits to Irish bond markets was short-lived. LME aluminum prices have fallen to the cost line currently, and LME aluminum inventories declined again, and aluminum prices will find support if the declines continue in the future.  

SHFE aluminum prices opened slightly higher, and SMM predicts domestic stock markets will rebound slightly driven up by strengthening global stock markets, which will stimulate SHFE aluminum prices, and SHFE 1010 aluminum contract prices are expected to struggle at RMB 15,000/mt. 


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