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SMM Morning Review - 2010/9/3 Aluminum Market
Sep 3,2010 10:13CST
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SHANGHAI, Sept. 3 (SMM) -- On September 2nd, the pending home sales index, factory orders, and initial jobless claims in July released by the US government were positive, and optimistic sentiment continued as a result. However, market players made deals with caution due to a lack of confidence in the US nonfarm employment data due for release Friday night, with Dow Jones Industrial Average only rising mildly to 10,320.1 points. The US dollar index fell slightly to 82.467, while LME base metals prices generally closed with gains.   

Crude oil prices jumped to USD 75.01/bbl after a platform owned by Mariner Energy Inc. in the Gulf of Mexico was struck by an explosion, with a gain of 1.5%. LME aluminum prices were pushed up by crude oil prices unexpectedly, posting remarkable gains. LME aluminum prices moved higher all the way after opening at USD 2,105/mt, and finally closed at the daily high of USD 2,145/mt, up USD 37/mt compared with the previous trading day, or up 1.8%. Total trading volumes were 131,721 lots, while positions were 655,995 lots, down 3,778 lots. LME aluminum inventories fell by 3,275 mt to 4,432,200 mt. 

SHFE aluminum prices opened higher today supported by strong LME aluminum prices, but any upside room for SHFE aluminum prices will be very limited due to weak market fundamentals if SHFE copper and zinc prices show weak performance today. Special attention should be paid to the Shanghai Stock Exchange Composite Index trends today, and SMM expects SHFE 1012 aluminum contract prices to test the RMB 15,700/mt resistance level.   


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