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SMM Morning Review - 2011/10/21 Aluminum Market
Oct 21,2011 09:56CST
price review forecast
SMM expects LME aluminum to slightly rebound today. The most active SHFE 1112 aluminum contract may fall to a stop with pressure being built at RMB 16,000/mt.

SHANGHAI, Oct. 21 (SMM) – The market panic continued overnight amid EU summit delay possibilities, bearish remarks from German finance minister on leveraging EFSF, and disappointing euro zone confidence index, US employment data and Philadelphia Fed manufacturing data etc.

LME aluminum once dropped to USD 2,078/mt, a new low since September 1st 2010 overnight, and narrowed gains at the tail of trading to finally close at USD 2,108.5/mt, down USD 72.5/mt or 3.32%. The metal also saw its largest daily loss in October. Transactions doubled to over 24,800 lots during the day due to strong short selling. Total positions increased 2,167 lots to 851,848 lots.

Investor worries towards the European debt crisis will spread to today’s Asian markets. SMM expects LME aluminum may slightly rebound, and may also drop below the USD 2,100/mt mark again during today’s trading. The most active SHFE 1112 aluminum contract is expected to open lower near RMB 16,800/mt today, not excluding the possibility of falling to a stop to build pressure at RMB 16,000/mt. The SHFE 1201 aluminum contract may become the most active one today if positions of the contract again increase significantly. Spot premiums over the SHFE current-month aluminum price will stay between RMB 130-180/mt supported by goods holders’ low selling interest. However, market transactions will be quite limited.

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