SMM Morning Review - 2011/9/1 Aluminum Market

SHANGHAI, Sept. 1 (SMM) – Investor confidence for LME aluminum rose overnight backed by optimistic expectation for China aluminum consumption in September and better-than-expected factory orders from the US (2.4% to 1.9%), thereby pushing LME aluminum prices to close USD 44.8/mt or 1.84% higher at USD 2471.8/mt, a new high since August 5th. The four-day gain of LME aluminum also forced shorts to exit, with positions falling by 3,057 lots to 720,372 lots.

SMM expects LME aluminum prices to test the 30-day moving average and fluctuate between USD 2,430-2,480/mt on September 1st. Most active SHFE 1111 aluminum contract is expected to open higher near RMB 17,600/mt and fluctuate between RMB 17,450-17,650/mt. Spot premiums are expected to stay between RMB 80-130/mt as goods holders keep their quotes firm, but transactions will be limited since aluminum consumption will remain weak on capital pressure.