SMM Morning Review - 2012/6/1 Aluminum Market

SMM Insight 09:41:29AM Jun 01, 2012 Source:SMM

SHANGHAI, Jun. 1 (SMM) – Weak US ADP employment data for May and final 1Q GDP released overnight reignited risk aversion, helping the US dollar index return above 83 and record a new 2012 high. LME aluminum weighed by the strong US dollar, dropped below USD 2,000/mt and for the first trading day failing to return above the mark, closing down USD 16/mt or 0.8% at USD 1,994/mt. Total positions added 3,415 lots to 721,561 lots. Latest LME aluminum stocks were down 10,425 mt at 4,918,925 mt.

Risk aversion is strong in markets. The May PMI data and U.S. non-farm payroll data to be released today is likely to be weak, which will weigh on aluminum prices. LME aluminum will face stronger pressure at USD 2,000/mt and should move between USD 1,980-2,005/mt. The most active SHFE aluminum contract for September delivery should open lower near RMB 15,900/mt, see weakening support at the mark and test support at RMB 15,850/mt. Its trading band should be RMB 15,850-15,950/mt. Though liquidity pressure will gradually ease as June starts, goods holders’ selling interest remains high due to strong bearishness. Downstream buying stays weak. Spot discounts or premiums should stay within RMB 20/mt. The wait-and-see sentiment is heavy and deals will be limited.

SMM Morning Review - 2012/6/1 Aluminum Market

SMM Insight 09:41:29AM Jun 01, 2012 Source:SMM

SHANGHAI, Jun. 1 (SMM) – Weak US ADP employment data for May and final 1Q GDP released overnight reignited risk aversion, helping the US dollar index return above 83 and record a new 2012 high. LME aluminum weighed by the strong US dollar, dropped below USD 2,000/mt and for the first trading day failing to return above the mark, closing down USD 16/mt or 0.8% at USD 1,994/mt. Total positions added 3,415 lots to 721,561 lots. Latest LME aluminum stocks were down 10,425 mt at 4,918,925 mt.

Risk aversion is strong in markets. The May PMI data and U.S. non-farm payroll data to be released today is likely to be weak, which will weigh on aluminum prices. LME aluminum will face stronger pressure at USD 2,000/mt and should move between USD 1,980-2,005/mt. The most active SHFE aluminum contract for September delivery should open lower near RMB 15,900/mt, see weakening support at the mark and test support at RMB 15,850/mt. Its trading band should be RMB 15,850-15,950/mt. Though liquidity pressure will gradually ease as June starts, goods holders’ selling interest remains high due to strong bearishness. Downstream buying stays weak. Spot discounts or premiums should stay within RMB 20/mt. The wait-and-see sentiment is heavy and deals will be limited.