SHANGHAI, Feb. 23 (SMM) – Encouraged by strong performance of LME aluminum, SHFE three-month aluminum gapped higher at RMB 16,245/mt and hit a high of RMB 16,260/mt before securing gains of RMB 70/mt or 0.43% at RMB 16,250/mt at the end of trading on Wednesday. Transactions increased 6,598 lots to 14,460 lots, a two week high. Despite the latest rebound, SMM expects the contract to continue test of RMB 16,200/mt in the near term as weak demand and high stocks still weigh on aluminum prices.
Spot aluminum prices stayed between RMB 15,880-15,900/mt in Shanghai, at discounts of RMB 110-130/mt over the SHFE current-month aluminum price. Low-iron aluminum traded between RMB 15,970-15,990/mt. Only traders were active in the spot market, open to discussions on either outbound or inbound goods as futures prices climbed, which to a certain extent led to wider discounts.