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SMM Daily Review - 2011/9/20 Aluminum Market
Sep 21,2011 09:17CST
price review forecast
Most active SHFE 1111 aluminum contract closed at RMB 17,190/mt, up RMB 15/mt or 0.09% from previous trading day. Shanghai spot aluminum traded between RMB 17,470-17,510/mt.

SHANGHAI, Sept. 21 (SMM) – Most active SHFE 1111 aluminum contract opened lower at RMB 17,120/mt on September 20th and stabilized in the morning following a plunge during previous trading day. The contract hit an intraday high of RMB 17,225/mt in the afternoon, but fluctuated downward later due to strong resistance at the 5-day moving average above. Finally closed price of the contract was RMB 17,190/mt, up RMB 15/mt or 0.09% from previous trading day. Positions of the contract decreased 2,654 lots to 108,896 lots, and transaction volume of SHFE 1112 aluminum contract topped all other contracts. Most active SHFE aluminum contract consolidated at RMB 17,100/mt today and showed more stability compared with other base metals. If the most active contract is changed into SHFE 1112 contract and meets strong resistance at the moving averages above, SMM expects it to test support at RMB 17,000/mt at first.

Traded prices of spot aluminum in Shanghai were between RMB 17,470-17,510/mt on September 20th, with premiums of RMB 120-160/mt over SHFE current-month aluminum price. In the morning, the wait-and-see attitude prevailed in the spot aluminum market after SHFE aluminum price stabilized following a plunge during previous trading day. Except for a few value-retaining transactions and selling at lower prices among traders with high capital pressure, most spot aluminum traders were holding goods. Meanwhile, buying interest at lower prices downstream did not improve due to fluctuating prices and capital pressure, thereby dragging down mainstream trading price to below RMB 17,500/mt. Market transactions were sparse as a result. In the afternoon, after SHFE current-month aluminum contract climbed and even broke through the RMB 17,400/mt mark as a result of profit-taking by the shorts, the wait-and-see sentiment turned even stronger among spot aluminum traders, with only a few quotations at RMB 17,480/mt being reported among several traders with high capital pressure. As inquiries were even less, market transactions were hardly seen.

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