SHANGHAI, Dec. 16 (SMM) – After LME aluminum dropped to a yearly low, the most active SHFE four-month aluminum contract gapped lower for a third day at RMB 15,600/mt on December 15th. The contract hit an intraday high of RMB 15,715/mt supported by bargain hunting, slipped later weighed by weakness in the Shanghai Composite Index, and finally closed RMB 230/mt or 1.45% lower at RMB 15,645/mt. Positions of the contract increased 5,300 lots to 73,986 lots. Transactions broke through 20,000 lots for the first time since December 1st and shorts still accounted for major transactions. SMM expects the contract to struggle near RMB 15,600/mt in the near term.
Traded prices of spot aluminum in Shanghai were between RMB 15,830-15,860/mt on Thursday, with premiums of RMB 40-60/mt over the SHFE current-month aluminum price. In the morning, SHFE aluminum prices gapped lower and led to a slump of as much as RMB 200/mt in spot prices. With only one day ahead of delivery date of the SHFE current-month aluminum price, expanded premiums boosted buying for futures and thereby narrowing losses of the SHFE current-month aluminum contract. Spot prices slipped and deals were hardly concluded for aluminum spot as a result. In the afternoon, the SHFE current-month aluminum price stabilized. Deals for aluminum support stayed sparse, however, as supply was quite scarce.