SMM Morning Review - 2012/6/11 Aluminum Market

SHANGHAI, Jun. 11 (SMM) – LME aluminum hit a low of USD 1,968/mt and almost recovered later supported by bargain-hunting, settling down a slight USD 2/mt or 0.1% at USD 1,986/mt on Friday. The wait-and-see sentiment was strong before delivery of Chinese economic data for May and as European leaders stepped up efforts on aid for Spanish banks. Latest LME aluminum stocks were down 11,175 mt to 4,864,200 mt.

China inflation in May dropped more than expected, laying the foundation for subsequent easing policies. But at the same time, industrial production also contracted heavily. The poor economic situation also to a certain extent curbed market optimism. So today aluminum will exhibit a slight rebound. LME aluminum is expected to try standing above the USD 2,000/mt mark and test pressure at the 20-day averages as it moves between USD 1,985-2,015/mt. The most active SHFE 1209 aluminum contract is expected to test pressure at RMB 16,000/mt and hover between RMB 15,900-16,000/mt. Spot aluminum will rebound with aluminum futures. Spot discounts and premiums should both be within RMB 20/mt. The selling interest is strong but buying remains weak, so trading will remain light.