SHANGHAI, Sept. 29 (SMM) – The most active SHFE 1112 aluminum contract opened higher at RMB 16,630/mt on September 28th, and stood steady at the 5-day moving average in the morning supported by profit-taking by the shorts. In the afternoon, after Shanghai Composite Index dipped below the 2,400 mark, increased short selling dragged the contract below the 5-day moving average again. The profit taking at the tail of trading, however, helped the contract rebound and finally close at RMB 16,595/mt, up RMB 120/mt or 0.73% from previous trading day. Positions of the contract decreased 3,488 lots to 106,358 lots. Poor economic situation before the National Day holiday forced long capital to exit and the shorts dominated the market with repeated short selling and profit taking, eroding upward momentum of the aluminum contract. SMM expects the most active SHFE aluminum contract to struggle at RMB 16,500/mt during the last two trading days before the coming holiday as longs and shorts will mainly close their positions.
Traded prices of spot aluminum in Shanghai were between RMB 17,110-17,150/mt on September 28th, with premiums of RMB 180-200/mt over the SHFE current-month aluminum price. In the morning, inquiries and purchases were rarely seen as stock building before the coming National Day holiday already ended. With the SHFE current-month aluminum contract struggling at RMB 17,000/mt and spot aluminum inventories staying at low levels, the wait-and-see sentiment gained strength among goods holders, keeping spot premiums over the SHFE current-month aluminum price near RMB 200/mt. Market transactions were sparse as sellers and buyers argued over prices. In the afternoon, after the SHFE current-month aluminum price slipped, though this was followed by a rebound, the selling interest among goods holders dropped, with only a few quotations seen at RMB 17,090-17,130/mt. Some middlemen inquired for small orders, but transactions were hardly reached due to price divisions.