SHANGHAI, Aug. 12 (SMM) -- LME base metals prices closed with declines yesterday. LME aluminum prices opened at USD 2,175/mt, with the highest level and the lowest level at USD 2,175/mt and USD 2,140/mt, respectively, and finally ended at USD 2,142/mt, down USD 28/mt compared with the previous trading day, or down 1.3%. Total trading volumes were 165,940 lots, and total positions were 720,589 lots, down 2,498 lots. LME aluminum inventories increased by 1,900 mt to 4,388,375 mt.
A stream of negative economic news was released on Wednesday. The US government announced that the budget deficit was USD 165.04 billion in July, and the budget deficit has been existent for 22 consecutive months. The US trade deficit in June was USD 49.9 billion, setting a new high since October 2008. The Bank of England cut growth forecast for UK economy. China's macro economic data for July reflects China's economy slowed in July. The negative key economic data shifted investor risk appetite to safe-haven currency, and the European and the US stock markets plunged in response, with Dow Jones Industrial Average falling by 2%, while the US dollar index advanced to above 82 as a result. LME aluminum prices fell to below the 10-day moving average, with technical indicators showing signs of falling further.
SHFE aluminum prices opened lower today, and SHFE 1011 aluminum contract prices have fallen below the 20-day moving average despite that their declines were weaker than copper and zinc prices. In this context, SHFE aluminum prices will not likely rebound in the short term after loosing support at the important level.
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