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SMM Daily Review – 2011/7/19 Aluminum Market
Jul 20,2011 09:10CST
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SHANGHAI, Jul. 20 (SMM) – Most active SHFE aluminum contract changed to 1110 on July 19. In the morning session, after opening higher at RMB 17,680/mt

SHANGHAI, Jul. 20 (SMM) – Most active SHFE aluminum contract changed to 1110 on July 19. In the morning session, after opening higher at RMB 17,680/mt, SHFE aluminum prices temporarily broke RMB 17,700/mt and hit RMB 17,725/mt. However, after short selling increased, SHFE aluminum prices fell and fluctuated near RMB 17,650/mt. SHFE 1110 aluminum prices finally closed at RMB 17,665/mt, up RMB 85/mt or 0.48% from previous trading day. Since the shorts increased their positions, SHFE aluminum prices failed to maintain previous momentum. Total positions of most active SHFE 1110 aluminum contracts increased by 8,362 lots to 107,620 lots. SMM expects supply shortage of spot aluminum will push SHFE aluminum prices to test RMB 17,800/mt in the short term.

Traded prices of spot aluminum in Shanghai on July 19 were RMB 17,750-17,780/mt, with premiums of positive RMB 60-80/mt over SHFE current-month aluminum contract prices. In the morning, as SHFE aluminum prices kept rising, spot aluminum holders became increasingly bullish toward aluminum prices. Unwillingness to sell was also strong among goods holders due to low inventories. However, purchases fell with rising spot aluminum prices. As a result, market transactions were quite limited. In the afternoon, SHFE current-month aluminum prices gained strong support at RMB 17,700/mt, and spot aluminum prices also stood steady between RMB 17,770-17,780/mt. As aluminum prices surged, some middlemen purchased in small volumes to build up inventories. However, market transactions were rarely reported due to limited supply of spot aluminum.


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