SMM Daily Review - 2012/4/11 Aluminum Market

SHANGHAI, Apr. 12 (SMM) – The SHFE aluminum contract for July delivery became the most actively traded one on Wednesday, after positions jumped 9,980 lots following an overnight plunge in LME aluminum. The contract dropped RMB 135/mt or 0.83% to RMB 16,095/mt with transactions doubling to 19,608 lots. Bargain hunting appeared but failed to prevent the downside run. Difference between contracts for near-term delivery narrowed as a result of stability. SMM expects the contract to continue struggling at the RMB 16,100/mt mark in the near term.

Spot aluminum was traded between RMB 15,960-15,990/mt in Shanghai, at premiums of RMB 0-20/mt over the SHFE current-month aluminum price. Losses in SHFE aluminum dragged spot prices below the RMB 16,000/mt mark. Slight premiums were maintained as low selling interest stayed. Some traders in urgent need of cash moved goods at current-month SHFE aluminum prices. Some buyers concluded deals in the futures market as the delivery date is near, which somewhat helped the current-month contract recover. Trading is turning light in the face of supply sufficiency and weak demand.