SHANGHAI, Oct. 27 (SMM) – The SHFE 1201 aluminum contract became the most active aluminum contract on October 26th. China’s Prime Minister Wen Jiabao said on the previous day that the country’s macro economic policies need to be fine-adjusted at times appropriate, this helped strengthening investors’ confidence, with the Shanghai Composite Index consolidating at the 2,400 mark and further climbing. SHFE copper prices also climbed slightly during the day. SHFE aluminum prices, however, provided little response to the remarks, with the most active SHFE aluminum contract closing RMB 95/mt or 0.58% lower at RMB 16,360/mt during the day.
Transactions of the day contracted 65% to 40,000 lots, while positions of the contract increased 3,698 lots to 65,004 lots. Investors turned to contracts for delivery in a longer time due to weak fundamentals of the aluminum market. The limited price gaps among different contracts, however, had maintained little investors' interest for the metal. SMM expects the most active SHFE aluminum contract to struggle at RMB 16,300/mt before the direction is determined by results from the EU Summit.
Traded prices of spot aluminum in Shanghai were between RMB 16,380-16,440/mt on October 26th, with premiums of RMB 20-50/mt over the SHFE current-month aluminum price.
In the morning, the SHFE current-month aluminum price opened lower and narrowly fluctuated below RMB 16,400/mt. Though SHFE copper prices have been climbing during recent two days, aluminum prices are continuously falling. Spot aluminum supply remained excessive, its premiums over the SHFE current-month aluminum price, however, slightly widened as goods holders stuck to the RMB 16,400/mt mark. Market transactions were limited.
Spot aluminum prices slipped slightly to RMB 16,380-16,400/mt in the afternoon as transaction was hardly reached at the RMB 16,400/mt mark. The wait-and-see sentiment was strong in the afternoon.