SMM Daily Review - 2012/2/13 Aluminum Market

SHANGHAI, Feb. 14 (SMM) – The most active SHFE aluminum contract for delivery in May struggled at the 5-day moving average and finally closed down RMB 40/mt or 0.24% at RMB 16,290/mt on Monday, with less than 10,000 contracts being transacted. Lower expectations of loosening property curb has damped optimism towards the metal, which is expected to meet stronger resistance at RMB 16,300/mt in the near term.

Spot aluminum traded mainly between RMB 15,900-15,940/mt in Shanghai, at narrower discounts of RMB 30-70/mt over the SHFE current-month aluminum contract which is being pressured and to shift to the following one. Middlemen hardly received goods lacking arbitrage opportunities while downstream demand stayed weak.

In a recent SMM survey on this week’s aluminum prices, 74% market respondents expect stability as pressure from lasting curb on the property market and contracted export orders due to the European debt crisis will be offset by high production cost. 18% of respondents said aluminum prices will climb this week, mainly supported by high copper prices and withholding of goods by large aluminum producers in a bid to pull aluminum price above RMB 16,000/mt. Remaining 8% respondents expect lower aluminum prices this week as continually climbing domestic and overseas aluminum stocks weigh on the metal and spot discounts are expected to return above RMB 100/mt over the SHFE current-month aluminum contract which will shift to the following one.