SHANGHAI, Feb. 8 (SMM) – The euro rebounded overnight, dragging the US dollar index to 78.488, a two-month low, as investors held high hopes for Greek debt talks. LME aluminum initially struggled at USD 2,200/mt and hit USD 2,264/mt supported by short covering after Fed President Bernanke said manufacturing recovery was inspiring. The metal regained support at the 20-day moving average and closed up USD 37/mt or 1.67% at USD 2,255/mt.

LME aluminum has been experiencing the gain-loss cycle for 9 consecutive trading days, though the mainstream traded price dropped a little bit, support below has been strong. SMM expects LME aluminum to move between USD 2,230-2,290/mt and may test USD 2,300/mt during today’s trading supported by optimism towards today’s Greek debt talks. The most active SHFE three-month aluminum contract is expected to open slightly higher above RMB 16,200/mt and hover between RMB 16,165-16,275/mt. The SHFE current-month aluminum price may return to RMB 16,000/mt but spot discounts should stay between RMB 50-100/mt due to weak downstream demand. Market supply will be sufficient but deals will be limited.