SMM Daily Review - 2012/6/1 Aluminum Market

SHANGHAI, Jun. 4 (SMM) – The most active SHFE aluminum contract for September delivery settled down RMB 20/mt or 0.13% at RMB 15,935/mt last Friday, after struggling near RMB 15,955/mt amid stimulus expectations triggered from a worse-than-expected contraction in May CPI and a poor demand outlook. Positions added 3,004 lots to 100,274 lots. SHFE aluminum futures should remain weak and test support at RMB 15,900/mt this week as pressure has been coming from several sides.

Spot aluminum was traded at RMB 15,930-15,960/mt in Shanghai, with low-iron aluminum trading at RMB 16,010-16,040/mt. Stagnating SHFE aluminum prices weakened spot aluminum’s ability to rebound. As cash flow pressure began to ease in early June, goods holders became less willing to lower quotations. Downstream processors purchased a little to replenish stocks before the weekend. Trading warmed in Wuxi and Hangzhou, with their mainstream trading bands and traded volumes climbing a little bit, but stayed light in Shanghai.