SMM Daily Review - 2011/12/28 Aluminum Market

SHANGHAI, Dec. 29 (SMM) – SHFE aluminum for three-month delivery opened at RMB 15,875/mt and climbed to struggle near RMB 15,920/mt in the morning. Though the contract temporarily dropped below the intraday average in the afternoon, support showed at RMB 15,900/mt based on the total traded volume. Total positions of the contract lost 2,184 lots as some shorts cleared their holdings, which in turn helped transactions gain 3,962 lots to 10,244 lots. Though the most active SHFE aluminum contract saw temporary support at RMB 15,900/mt, its downside risks are high when negative news comes out.

The SHFE current-month aluminum price opened at RMB 16,000/mt and closed at RMB 16,005/mt after hitting RMB 16,060/mt, the intraday high. Transactions for the contract were only 1,416 lots. Spot aluminum was traded between RMB 16,020-16,050/mt in Shanghai, with discounts of RMB 10-40/mt over the current-month contract. The traded volume was little changed. Though the overall prices were up RMB 20/mt compared with the previous trading day, traders are still slightly bearish.