SHANGHAI, Oct. 17 (SMM) – China’s preliminary results from its inflation fight and a deadline for a bailout plan for the European debt crisis during the G20 summit eroded momentum of the US dollar index to return above 77 last Friday. However, LME aluminum only rose slightly during the day due to weaker Chinese demand compared with previous years. The metal finally closed below the 5-day moving average at USD 2,228/mt, up 0.97% from previous trading day. Total positions increased 5,550 lots to 849,184 lots.
Though investors have become cautiously optimistic towards for the aluminum market, no significant changes are expected for the metal in the short term due to weak demand. As such, LME aluminum is expected to test the 5-day moving average and fluctuate between USD 2,200-2,230/mt during today’s trading. The most active SHFE 1112 aluminum contract is expected to open near RMB 16,650/mt and fluctuate between RMB 16,650-16,750/mt. Low downstream buying interest is expected to keep spot aluminum prices near RMB 16,900/mt on the last trading day of the SHFE current-month aluminum contract. Spot premiums over the current-month aluminum contract are expected to be ±RMB 20/mt. Market transactions will be limited.