SMM Morning Review - 2012/1/17 Aluminum Market

SHANGHAI, Jan. 17 (SMM) – LME three-month aluminum gained USD 22.8/mt or 1.06% overnight as impact of euro zone downgrades faded and focus is put on today’s Chinese GDP data. American markets were closed on Monday in memory of Martin Luther King. Transactions for LME aluminum therefore were down almost by half.

China’s 4Q GDP data is due to come out 10 A.M. Beijing time today and is followed by the New York Fed manufacturing index which may determine market directions. Investors are expected to be restrained before release of above data. SMM expects LME aluminum to struggle at the 5-day moving average and move between USD 2,120-2,180/mt during today’s trading. The most active SHFE three-month aluminum contract is expected to open at RMB 16,200/mt and hover between RMB 16,100-16,250/mt. Spot aluminum is expected to trade at discounts of RMB 40-100/mt over the SHFE current-month aluminum price. Most traders almost closed operation ahead of Chinese New Year while some with tight cash flows will continue goods movements at lower prices.