SMM Aluminum Price Forecast (May 14-18)

SHANGHAI, May 14 (SMM) – Due to weakness in the macro economy, the most active SHFE aluminum contract erased the previous week’s gains and fell below RMB 16,100/mt last week. SMM aluminum prices fell from RMB 16,180/mt to RMB 16,060/mt. Current bearish market sentiment was strong, with demand weak and traders unwilling to sell at low-end prices. Supply at low-end prices was still available, however, from traders facing tight cash flows. The trading band held steady at RMB 20/mt, while spot discounts virtually disappeared as the delivery date neared. Premiums were rare since supply was sufficient and trading was light. Even superior quality ingots commanded only RMB 10/mt in premium. The light metal is expected to test support at RMB 16,100/mt as heavy losses is unlikely given operation losses of aluminum smelters.