SMM Brief Review - 2011/10/27 SHFE Aluminum Futures

Aluminium Ingot January Production Analysis & February Forecast

According to SMM's research findings, Yunnan Province is currently experiencing a dry season, with hydropower contribution remaining at a relatively low level. Enterprises have no immediate plans for production resumption and await clearer policy guidance from the power sector.

The implementation of Indonesia's ban on bauxite exports since June last year has led to bauxite surplus, brought challenges to consume domestically as the Indonesia's alumina plants have limited capacity. Ronald Sulistyanto, Chairman of the Indonesian Bauxite and Iron Ore Entrepreneurs Association (Asosiasi Pengusaha Bauksit dan Bijih Besi Indonesia - APB3I), highlighted the struggle to secure external investment for alumina plant projects, while some entrepreneurs are forced to cut costs or halt production. However, there is hope for relief through potential relaxation of the export ban policy. Efforts are underway to boost alumina production capacity, although challenges persist in addressing the surplus bauxite issue.

At current spot prices, the smelters generate strong cash flow.

LME aluminum will trade at USD 2,005-2,035/mt on Thursday, and SHFE 1710 aluminum will regain losses seen on Wednesday’s night trading, with price estimated at RMB 16,000-16,250/mt. 

Novelis Inc. has announced that it has more than tripled its net income during the first quarter of fiscal year 2018.

SHFE 1705 aluminum opened at RMB 14,135/mt and ended at RMB 14,225/mt.

LME aluminum will advance during Asian trading hours on Wednesday and will move at USD 1,913-1,950/mt. SHFE 1706 aluminum will move at RMB 13,900-14,150/mt.

SHFE 1706 aluminum, becoming the most actively traded one, opened at RMB 14,065/mt and closed at RMB 13,980/mt.

LME aluminum will move at USD 1,910-1,950/mt. SHFE 1705 aluminum will move at RMB 13,850-14,100/mt.