SMM Morning Review - 2012/3/12 Aluminum Market

SHANGHAI, Mar. 12 (SMM) – LME three-month aluminum futures broke through the 5-day moving average and closed up USD 25.3/mt or 1.14% at USD 2,238.3/mt last Friday, backed by a lower-than-expected CPI growth in China and the latest around EUR 100 billion Greek debt cut. Its gains were limited, though, by on-going worries towards the Greek debt crisis which is still far from and ending.

Positive economic data from China and the US will temporarily beat worries towards debt problems in Europe. As such, SMM expects LME three-month aluminum to test resistance at the 20-day moving average and move between USD 2,215-2,255/mt. The most active SHFE aluminum contract for May delivery is expected to move between RMB 16,180-16,260/mt given strong resistance at the 30-day moving average. Spot discounts over the SHFE current-month aluminum price will gradually drop below RMB 50/mt as the delivery date nears. Spot discounts today are expected to be RMB 20-60/mt. Goods holders will be interested in moving goods but deals will stay limited due to weak demand.