SMM Morning Review - 2012/5/10 Aluminum Market

SHANGHAI, May 10 (SMM) – A European source disclosed that EFSF committee would decide whether to release the second batch EUR 5.2 billion loan to Greece on Wednesday, easing risk aversion due to obstacles for implementation of austerity measures caused by the Greek election. LME aluminum firstly dropped to a low of USD 2,025.8/mt, near the lowest of this year, then recovered most losses settling down USD 2/mt or 0.1% at USD 2,054/mt.

China will release preliminary import and export data of April today, which will affect market direction. Worries towards European debt are not likely to disappear for the near term, eroding momentum of commodities. LME aluminum is expected to test support at USD 2,050/mt and may exhibit a downside run if support is found to be weak. Its moving band is USD 2,020-2,080/mt. The most active SHFE aluminum contract for August delivery is expected to open near RMB 16,160/mt, seeking direction from trade data and may test pressure at RMB 16,200/mt. Its moving band will be RMB 16,140-16,240/mt. The bearish sentiment is strong in the spot market. Downstream will purchase on an as-needed basis. Goods holders are still unwilling to move goods at low-end prices, holding aluminum prices near RMB 16,100/mt. Deals will be done near the current-month SHFE aluminum price as delivery date nears. Discounts and premiums are seen within RMB 20/mt.