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SMM Morning Review - 2010/8/9 Aluminum Market
iconAug 9, 2010 09:44iconCST

SHANGHAI, Aug. 9 (SMM) -- LME base metals prices were mixed last Friday. LME aluminum prices opened at USD 2,200/mt, with the highest level and the lowest level at USD 2,225/mt and USD 2,191/mt, respectively, and finally ended at USD 2,195/mt, down USD 8/mt compared with the previous trading day, or down 0.4%. Total trading volumes were 160,143 lots, and total positions were 725,835 lots, up 10,668 lots. LME aluminum inventories declined by 2,825 mt to 4,397,675 mt.

The US Labor Department announced last Friday that the non-farm payrolls in July fell by 131,000, higher than the previous forecast of a drop of 65,000, again eroding investor confidence in economic recovery. As a result, the European and the US stock markets edged lower, and crude oil prices slumped by 1.6% to USD 80.7/bbl. LME aluminum prices fell below the 5-day moving average as well, and although the US dollar index weakened by 0.53% last Friday, LME aluminum prices still moved lower.

China's Ministry of Industry and Information Technology again ordered more than 2,000 companies in 18 industries to shut down inefficient capacity at the end of 2010, and unveiled the detailed list of companies. In this context, SHFE aluminum prices opened slightly higher today following other base metals, and SHFE 1011 aluminum contract prices still stood above the 5-day moving average. However, the number of aluminum producers and aluminum capacity involved in the list are limited, so any impact on aluminum market is expected to be limited as well. In addition, how domestic market players to analyze the impact from this policy on domestic financial markets will become the key factor affecting the SHFE market. Spot discounts will remain within RMB 100/mt before the delivery date, and SMM predicts SHFE 1011 aluminum contract prices will fluctuate between RMB 15,650-15,800/mt today.   


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