SHANGHAI, Oct. 26 (SMM) – Market rumors that the meeting by European finance ministers scheduled today may be cancelled, together with the US consumer confidence index dropping to a new low since March 2009, severely damped investor confidence overnight. As a result, LME aluminum erased gains during the day and closed USD 6.3/mt or 0.28% lower at USD 2,211/mt. Total positions increased 233 lots to 863,191 lots.
The EU Summit will be held as planned today. However, most investors think a longer time is needed for Euro zone countries which have different financial systems to reach an agreement for the Euro zone debt bailout. Therefore, cautiousness will prevail among today's investors. SMM expects LME aluminum to struggle at USD 2,200/mt today, which is likely to drop below the mark if the EU Summit disappoints investors. The most active SHFE aluminum contract may be changed to 1201, and is expected to open near RMB 16,350/mt and test support at RMB 16,250/mt. The selling interest among most traders will be low amid drastically fluctuating prices, though there may be some to liquidate at lower prices. The downstream buying interest is expected to remain weak. Spot premiums over the SHFE current-month aluminum price are expected to be maintained between negative RMB 10/mt to positive RMB 40/mt.