SMM Daily Review - 2012/6/21 Aluminum Market

SHANGHAI, Jun. 25 (SMM) – The most active SHFE aluminum contract for September delivery opened lower at RMB 15,655/mt and settled down RMB 125/mt at RMB 15,560/mt, after slipping to RMB 15,545/mt, a new low since September 2010. Positions of the October contract surged by over 10,000 lots, mostly short positions. The October contract should become the most actively traded one today. Bearishness will stay after the preliminary HSBC China PMI reported contraction. The most active SHFE aluminum contract is expected to test support at RMB 15,500/mt this week. Latest SHFE aluminum stocks were down 5,475 mt at 309,426 mt.

Spot aluminum prices were between RMB 15,710-15,730/mt in Shanghai, and RMB 15,800-15,820/mt for low-iron aluminum. Spot aluminum prices stabilized at RMB 15,700/mt as the current-month SHFE aluminum contract managed to stay near RMB 15,700/mt. Both selling and buying weakened before the holiday. Trading was relatively stable and some downstream buyers replenished stocks. Quotations were sparse and at RMB 15,680-15,700/mt in the afternoon after SHFE aluminum prices shed more losses. No deal was done in the afternoon.