SHANGHAI, Sept. 30 (SMM) -- The most active SHFE 1112 aluminum contract gapped over 2% lower at RMB 16,160/mt on September 29th due to reignited investor worries towards a default by Greece. The contract was pressed to an intraday low of RMB 16,020/mt by increased short selling during early trading hours, but rebounded later to hit RMB 16,570/mt with bargain hunting by the longs and profit-taking by the shorts. At the tail of trading, due to profit-taking by the longs, the most active contract slightly slipped to finally close at RMB 16,475/mt, down RMB 60/mt or 0.36% from previous trading day. Positions of the contract decreased 2,020 lots to 104,338 lots. With strong support at the RMB 16,000.mt mark, the most active SHFE aluminum contract rebounded to above the 5-day moving average during the day. As most longs and shorts will exit the market for risk aversion on the following and last trading day before the National Day holiday, the most active aluminum contract is expected to test RMB 16,500/mt on September 30th.
Traded prices of spot aluminum in Shanghai were between RMB 16,920-16,950/mt on September 29th, with premiums of RMB 200-220/mt over the SHFE current-month aluminum price. In the morning, after SHFE aluminum prices gapped over 2% lower, spot aluminum prices plunged in response. Since traders were gradually exiting the market, spot aluminum supply dropped significantly. Meanwhile, due to low stock levels among traders, spot premiums were held steady above RMB 200/mt. Downstream purchases were also quite limited, therefore transactions were rarely seen. In the afternoon, with a strong rebound in SHFE aluminum prices, spot aluminum prices also climbed to RMB 17,000/mt. As most traders already exited the market before the National Day holiday, market supply turned even tighter. However, no transaction was seen in the market since downstream buyers and middlemen did not accept aluminum prices at the moment.