SMM Morning Review - 2011/3/31 Aluminum Market

SHANGHAI, Mar. 31 (SMM) -- According to the payrolls report from ADP Employer Services on March 30th, the US private-sector employment increased by 201,000 in March, slightly lower than market forecast of an increase of 203,000, an indication that the US job markets remain weak. The US dollar index strengthened first but weakened later, with the index falling rapidly during European trading hours due to expectations that the European Central Bank will raise interest rates and finally closing at 76.126, up 0.006 compared with the previous trading day.

LME aluminum prices opened at USD 2,642/mt, and later fluctuated higher to USD 2,654/mt during Asian trading hours, with prices standing steady above the 5-day moving average. However, LME copper prices tumbled during European trading hours, dragging down LME aluminum prices to below the 5-day moving average, with prices even hitting a low of USD 2,614/mt. At the tail of trading, LME aluminum prices reversed some losses, and finally closed at USD 2,627/mt, down USD 22.5/mt or 0.85% compared with the previous trading day. Total positions increased by 3,943 lots to 727,952 lots.

Today, LME aluminum prices will struggle at the 5-day moving average, with prices expected to move between USD 2,610-2,650/mt. SHFE 1106 aluminum contract prices will open slightly lower, but the high-end prices will climb further, with prices expected to hover between RMB 16,800-16,900/mt. Spot aluminum prices are expected to test the pressure at RMB 16,600/mt, with spot discounts expected to remain above RMB 50/mt over SHFE current-month aluminum contract prices.                             

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