SHANGHAI, Feb. 21 (SMM) -- The People's Bank of China (PBOC) announced on Friday that it would increase the bank reserve requirement ratio by 50 basis points beginning February 24th. A committee member of European Central Bank said the bank will likely increase interest rate due to rising global inflationary pressures, and the euro strengthened against the US dollar in response. The US dollar index opened at 77.93 and closed at 77.62, down 0.39%. Although China tightened monetary policy further, any effects on markets were limited. Meanwhile, a weaker US dollar and investors’ optimistic expectations of metal demand in 2011 helped drive up LME base metals prices.
LME aluminum prices opened at USD 2,536/mt, and later climbed continuously, with prices finally closing at an intraday high of USD 2,570/mt, up USD 57/mt compared with the previous trading day, or up 2.3%. LME aluminum inventories fell by 5,025 mt to 4,593,175 mt.
Today, SHFE aluminum prices opened slightly higher, with prices continuing to move around the short-term moving averages, and SMM predicts SHFE 1105 aluminum contract prices will test the resistance at RMB 17,200/mt today.
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