SHANGHAI, Jul. 25 (SMM) -- Most active SHFE 1110 aluminum contract prices opened lower at RMB 17,560/mt on July 22nd, and fell below RMB 17,500 due to short selling at the beginning. Later SHFE 1110 aluminum contract prices rallied and fluctuated at RMB 17,600/mt after more longs entered the market. During the last ten minutes at the tail of trading, most active SHFE aluminum contract prices consolidated at RMB 17,600/mt as the longs actively built up positions. Finally closed price was RMB 17,640/mt, up RMB 60/mt or 0.34% from previous trading day. Total positions of most active SHFE 1110 aluminum contracts increased by 3,534 lots to 119,072 lots. Though SHFE aluminum prices lost upward momentum temporarily due to selling pressure, the longs still pushed SHFE aluminum prices to above the 5-day moving average. SMM expects most active SHFE 1110 aluminum contract prices to maintain current upward momentum and test RMB 17,700/mt in the short term. Latest SHFE aluminum inventories decreased by 12,052 mt to 203,777 mt. As the falling trend of aluminum inventories in Shanghai and Guangdong continues, aluminum prices will gain more upward momentum.
Traded prices of spot aluminum in Shanghai on July 22nd were between RMB 17,790-17,810/mt, with premiums of positive RMB 80-100/mt over SHFE current-month aluminum prices. In the morning, the quick rebounding of SHFE aluminum prices helped spot aluminum prices break RMB 17,800/mt, and spot premiums in Shanghai were kept at positive RMB 100/mt over SHFE current-month aluminum prices supported by supply shortage. However, market transactions were sluggish due to low buying interest at above RMB 17,800/mt. In the afternoon, SHFE current-month aluminum prices closed at a daily high, and spot aluminum prices stood steady above RMB 17,800/mt. However, no transaction was reported among the few purchasers due to supply shortage. As goods holders remain bullish, aluminum prices will gain certain support in the future.