SMM Aluminum Price Forecast (Feb. 20-24)

SHANGHAI, Feb. 20 (SMM) -- SHFE 1205 aluminum contract prices also fell continuously from RMB 16,300/mt, to RMB 16,120/mt, but with prices temporarily finding support at the 60-day moving average. Pessimism dominated the market, and daily trading volumes were around 10,000 lots. Spot discounts narrowed to near zero ahead of the delivery date for SHFE current-month aluminum contracts, but later returned to RMB 100/mt once the delivery date passed. Cargo-holder attitudes toward selling goods were mixed, with high-quality aluminum ingot unavailable in the market, while supply of non-registered brands was considered sufficient. Downstream processors purchased on an as-needed basis and purchase interest from middlemen was also low, resulting in limited transaction volumes. 

SMM predicts SHFE 1205 aluminum contract prices will fluctuate between RMB 16,000-16,200/mt. Downstream consumption is improving slowly, so any upward movement in spot aluminum prices will be limited and prices should move around RMB 15,900/mt. Spot discounts will remain stable at RMB 100/mt. Market supply will be sufficient, but trading activity will improve little.