SMM Daily Review - 2012/5/9 Aluminum Market

SHANGHAI, May 10 (SMM) – Losses in LME aluminum and Chinese stocks accelerated the slip of SHFE aluminum. The most active SHFE aluminum contract for August delivery gapped lower at RMB 16,200/mt and closed down RMB 115/mt or 0.71% at RMB 16,150/mt on Wednesday. Positions added 9,288 lots to 89,130 lots. SHFE aluminum weakened for a third day. Aluminum contracts are turning weaker as delivery time expands. If investors continue to join shorts, the most active contract may dip below RMB 16,100/mt.

Spot aluminum traded between RMB 16,070-16,100/mt in Shanghai, at discounts of RMB 20/mt to premiums of RMB 10/mt over the current-month aluminum price. SHFE aluminum prices weakened with the current-month contract being pressured at RMB 16,100/mt. Spot aluminum tracked aluminum futures in East China. Goods holders gradually became unwilling to move goods at low-end prices, holding quotations at RMB 16,100/mt. Most deals were done at slight discounts, however. The overall trading stayed light. In the afternoon, SHFE aluminum slipped further, the wait-and-see sentiment was strong in the spot market. Quotations were sparse and fell between RMB 16,070-16,090/mt. Downstream, bearish towards future aluminum prices, rarely inquired. Deals were hardly reported as a result.