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SMM Brief Review - 2011/9/19 SHFE Aluminum Futures

iconSep 19, 2011 16:39
Source:SMM
Most active SHFE 1111 aluminum contract gapped lower at RMB 17,100/mt today, and closed at RMB 17,105/mt, down RMB 25/mt or 1.44% from previous trading day.

SHANGHAI, Sept. 19 (SMM) – Most active SHFE 1111 aluminum contract gapped lower at RMB 17,100/mt today due to aggressive short selling, and climbed to an intraday high of RMB 17,290/mt during initial trading hours on profit taking by the shorts. After the longs were forced to exit by worries towards a downgrade on Italy debt by the credit rating agency Moody’s, the contract lost previous firm support at RMB 17,200/mt, and continued its downward move to finally close at RMB 17,105/mt, down RMB 25/mt or 1.44%. Positions of the contract decreased 4,284 lots to 111,514 lots. Position transfer to SHFE 1112 the next most active contract also continued. As aluminum consumption failed to improve as expected, SHFE aluminum plunged with other base metals, among which copper and zinc created yearly record lows. Though the most active SHFE 1111 aluminum contract was far from the yearly low, contracts for delivery after November all dropped below the RMB 17,000/mt mark. SMM expects the bearish tone to continuously prevail, and support for the most active contract at RMB 17,000/mt will also be relatively weak in the short term.

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