SMM Morning Review - 2012/5/22 Aluminum Market

SHANGHAI, May 22 (SMM) – LME aluminum failed to tracks gains in European and US equities overnight as short selling rapidly dragged it down from USD 2,073/mt, the intraday high. The light metal settled down USD 9.5/mt or 0.46% at USD 2,047.5/mt, after slipping below the 10-day moving average to USD 2,036/mt. It also ended LME aluminum’s 4-day gain. Latest aluminum stocks in LME-bonded warehouses dropped 10,325 mt to 4,964,850 mt.

Climbing LME copper prices will help metals continue their rebounds. LME aluminum is expected to struggle at USD 2,050/mt and move between USD 2,035-2,075/mt. The most active SHFE aluminum contract for August delivery should test support at the 10-day moving average and hover between RMB 16,070-16,170/mt. The rebound of SHFE aluminum futures failed to stimulate buying from downstream. Some goods holders showed strong selling interest at the month’s end. Spot aluminum is expected to trade at discounts of RMB 0-40/mt over the current-month SHFE aluminum price.