SHANGHAI, Oct. 28 (SMM) – The EU Summit on Wednesday did not disappoint investors, with a series of bailout plans being reached. Supported by the inspiring news, the Euro surged over 2.5%, with the US dollar index dropping below 75.
LME aluminum broke through the USD 2,250 resistance level of previous two trading days and closed USD 39/mt or 1.76% higher at USD 2,258/mt after hitting the intraday high of USD 2,295/mt. Total positions decreased 3,060 lots to 859,019 lots.
Despite of a continuous five-day gain, which indicates the bottom of LME aluminum prices has been consolidated, the metal is not likely to break through the USD 2,300/mt mark in the near term due to insufficient confidence among longs as reflected by decreased positions.
SMM expects LME aluminum to consolidate at USD 2,250/mt today. The most active SHFE 1201 aluminum contract is expected to open higher near RMB 16,600/mt, and may struggle at the 30-day moving average supported by longs.
The selling interest will be low among goods holders with an improving financial market sentiment. Spot premiums over the SHFE current-month aluminum price are expected to be maintained between negative RMB 10/mt to positive RMB 40/mt. The downstream buying interest will be stable, but stock building activities will be moderate.