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SMM Morning Review - 2010/8/4 Aluminum Market
Aug 4, 2010 10:02CST

SHANGHAI, Aug. 4 (SMM) -- LME base metals prices posted small declines yesterday. LME aluminum prices opened at USD 2,235/mt, with the highest level and the lowest level at USD 2,235/mt and USD 2,198/mt, respectively, and finally ended at USD 2,204/mt, down USD 13/mt compared with the previous trading day, or down 0.6%. Trading sentiment was sluggish, and total positions were 719,082 lots, up 3,935 lots. LME aluminum inventories increased unexpectedly by 22,650 mt to 4,403,750 mt.

LME base metals prices fell from high levels last night due to significant growth in LME base metals inventories, weaker-than-expected factory orders in the US, and disappointing housing data. Long players adopted a wait-and-see attitude after selling the metal to lock in gains. The US dollar remained weak, setting a new low, while the euro strengthened further in response. Crude oil prices climbed above USD 82/bbl, lending some support to LME aluminum prices. LME aluminum inventories returned to 4.4 million mt, and the growth in aluminum inventories to some extent means lower spot supplies. Meanwhile, current aluminum premium in Europe and North America remains high, and positive market fundamentals helped LME aluminum prices fall at a slower pace.   

SHFE aluminum prices opened slightly lower today tracking LME aluminum price trends, and SHFE aluminum market lacked continuous upward momentum during the traditional low demand period, but superficially positive market fundamentals helped aluminum prices move on an upward track. Special focus should be put on domestic financial market movements today, and SMM predicts SHFE 1011 aluminum contract prices will fluctuate between RMB 15,600-15,800/mt today.    


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