SHANGHAI, Feb. 13 (SMM) -- SHFE 1205 aluminum contracts became the most actively traded contracts on Thursday, and although SHFE 1205 aluminum contract prices climbed to RMB 16,300/mt, upward momentum was limited. Domestic consumption failed to improve after the Lantern Festival on February 6th, dragging down spot aluminum prices and with SMM aluminum prices falling rapidly below RMB 15,900/mt. Although cargo-holders were reluctant to move goods at lower prices, spot discounts still hovered between RMB 100-50/mt due to low buying interest. Middlemen were actively chasing profits from the spread between futures and spot market prices, and large traders were delivering goods for SHFE current-month aluminum contracts to generate cash, with actual consumption extremely sluggish.

SHFE 1205 aluminum contract prices will fluctuate between RMB 16,200-16,400/mt, with prices unlikely to make any strong gains in the short term. The resumption of production at downstream aluminum processors is slow following the holiday, so traders will mainly deliver goods for SHFE current-month aluminum contracts, keeping spot aluminum prices below RMB 16,000/mt.