SMM Morning Review - 2011/11/8 Aluminum Market

SHANGHAI, Nov. 8 (SMM) – The worsening debt issues of Greece and Italy have been continuously dampening market confidence. The meeting of European finance ministers did not present any breakthrough either. LME aluminum closed USD 11.3/mt or 0.53% lower at USD 2,125/mt overnight due to short selling at the tail of trading. Transactions volume of LME aluminum decreased to 5,679 lots. Total positions increased 62 lots to 892,695 lots. The latest LME aluminum stock increased 750 mt to 4,546,475 mt.

Italy has become another focus of investor worries towards the European debt crisis. The market sentiment will not see much ease. SMM expects LME aluminum to test support at USD 2,100/mt and fluctuate between USD 2,100-2,140/mt today. The most active SHFE aluminum contract 1201 is expected to open lower near RMB 16,250/mt and fluctuate between RMB 16,200-16,350/mt. The bearish sentiment will continue in the spot aluminum market. Market supply will be sufficient. Spot prices are expected to be at premiums of negative RMB 20/mt to positive RMB 20/mt over the SHFE current-month aluminum price. The downstream demand will remain weak, transactions won’t see much improvement.