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SMM Morning Review - 2010/8/20 Aluminum Market
Aug 20, 2010 10:16CST

SHANGHAI, Aug. 20 (SMM) -- The US government announced last night that the initial jobless claims last week increased unexpectedly to a nine-month high. The manufacturing index in the Philadelphia region turned negative in August for the first time in one year. The index of leading indicators in July was lower than expected. Trading sentiment turned pessimistic in response to negative economic data, and the disappointing employment and manufacturing data caused investors to shift their risk appetite. In this context, stock markets experienced sell-offs, and the US dollar strengthened. Crude oil prices fell by 1.3%, and base metals prices slipped as well.       

LME aluminum prices experienced larger declines than other base metals due to weak aluminum market fundamentals. LME aluminum prices opened at USD 2,125/mt, and then fluctuated in a narrow band during Asian trading period, but later dipped to USD 2,064/mt, and finally closed at USD 2,066/mt, down USD 39/mt compared with the previous trading day, or down 1.9%. Total trading volumes were 194,996 lots, and total positions fell by nearly 10,000 lots to 672,016 lots. LME aluminum inventories declined again by 5,100 mt to 4,464,675 mt.
SHFE aluminum prices were weaker than SHFE copper and zinc prices, and opened significantly lower today. Short-term moving averages have moved on a downward track, and SMM predicts SHFE 1011 aluminum contract prices will test the support at the 30-day moving average.          


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