SMM Morning Review - 2011/4/15 Aluminum Market

SHANGHAI, Apr. 15 (SMM) -- The US Labor Department announced on April 14th that the producer price index (PPI) for March rose by 0.7% on a monthly basis, lower than the forecast of 1.0%. The initial claims for jobless benefits increased to 412,000 unexpectedly last week, much higher than market expectations and hitting a 2-month high. At the same time, Greek government spokesman said Greece will not restructure debts, and will stick to the bailout from the European Union and International Monetary Fund. Negative economic data from US and impossible debt restructuring by the Greek government caused the US dollar index to fall to below 74.7.

LME aluminum prices fluctuated narrowly around the 20-day moving average last night. The weaker US dollar index boosted crude oil prices to above USD 108/bbl, and LME aluminum prices finally closed at USD 2,644/mt supported by higher energy costs, up USD 8/mt compared with the previous trading day. Total positions increased by 8,122 lots to 763,644 lots.

Today, LME aluminum prices are expected to climb slightly to between USD 2,630-2,660/mt. SHFE 1106 aluminum contract prices are expected to test pressure at RMB 16,800/mt after opening slightly higher. Spot aluminum is expected to be traded at zero discounts or slight premiums over SHFE current-month aluminum contract prices.     

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