SMM Daily Review - 2011/11/15 Aluminum Market

SHANGHAI, Nov. 16 (SMM) – The most active SHFE aluminum contract 1201 opened lower at RMB 16,250/mt on November 15th. Due to lasting worries towards the European debt crisis, after temporarily hitting the intraday high of RMB 16,310/mt, the contract slipped and closed RMB 95/mt or 0.58% lower at RMB 16,205/mt. The transaction volume was less than 20,000 lots. Positions of the contract decreased 278 lots to 81,190 lots. The SHFE current-month aluminum contract, which is to be delivered today, recovered most losses supported by increased purchases. SMM expects the most active SHFE aluminum contract to struggle at RMB 16,200/mt as the European debt crisis continues to weigh on the global markets.

Traded prices of spot aluminum in Shanghai were between RMB 16,080-16,120/mt on Tuesday, with discounts of RMB 10-30/mt over the SHFE current-month aluminum price. Low-iron aluminum was traded between RMB 16,160-16,200/mt in Shanghai. Traded prices of spot aluminum in Wuxi were between RMB 16,060-16,100/mt. The SHFE 1111 current-month aluminum contract opened lower and slipped early on its last trading day to below RMB 16,100/mt. Goods holders were reluctant to move goods after the drop, with discounts over the SHFE current-month aluminum price narrowing slightly, which pushed some buyers to purchase at lower prices, though. Meanwhile, brands for delivery were rarely seen in spot market, boosting buying interest for SHFE current-month aluminum futures. This in turn helped the current-month aluminum contract rally. Spot aluminum prices also rose above RMB 16,100/mt supported by gains in aluminum futures prices. Transactions were moderate in the morning, however. Spot aluminum consolidated at RMB 16,100/mt in the afternoon as the SHFE current-month aluminum contract stayed above RMB 16,150/mt. Spot was quoted between 16,100-16,500/mt and traded between RMB 16,100-16,120/mt in the afternoon as only lower-priced goods were accepted. The wait-and-see sentiment was strong.