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SMM Morning Review - 2010/9/8 Aluminum Market
Sep 8,2010 09:36CST
smm insight

SHANGHAI, Sept. 8 (SMM) -- The Wall Street Journal said on Tuesday that European stress tests of major banks understated some lenders' holdings of potentially risky government debt. German factory orders unexpectedly slid in July to a one-year low, indicating the recovery of Europe's largest economy may be faltering. As a result, major indexes on the European and the US stock markets posted a drop of over 1%, while the US dollar index strengthened to test 83, and LME base metals prices generally closed with declines in response.      

LME aluminum prices faced heavy pressure at USD 2,200/mt as new macro economic news was negative.  LME aluminum prices opened at USD 2,190/mt, with the highest level and lowest level at USD 2,195/mt and USD 2,130/mt, respectively, and finally closed at USD 2,161/mt, down USD 43/mt, or down 2%. Total trading volumes were 148,536 lots, while positions were 658,035 lots, down 2,808 lots. LME aluminum inventories fell by 4,575 mt to 4,417,075 mt.

SHFE aluminum prices fell at a much slower pace yesterday, but significant declines in LME aluminum prices last night exerted downward pressure on SHFE aluminum prices. In addition, China’s moves to strengthen energy savings and emission reductions policy only had limited positive impact on aluminum supply. In this context, SHFE 1012 aluminum contract prices opened lower today, with prices testing the support at 5-day moving average, and with eyes on the Shanghai Stock Exchange composite index trends today.           


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