SMM Morning Review - 2012/7/17 Aluminum Market-Shanghai Metals Market

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SMM Morning Review - 2012/7/17 Aluminum Market

Price Review & Forecast 11:04:49AM Jul 17, 2012 Source:SMM

SHANGHAI, Jul. 17 (SMM) -- Overnight U.S. June retail sales are down 0.5% MoM, much weaker than expected. Later the IMF lowered global economic growth forecast for 2013 to 3.9%, adding pressure on market confidence. However, the market focus immediately turned to Fed President’s testimony, which has triggered expectations of monetary easing. The sharp dive of the US dollar pushed commodity prices to rebound. LME aluminum dropped but closed higher during the European trading session, falling over 1% to USD 1,888.3/mt, and closing at the intraday high USD 1,917/mt, up USD 8/mt, or 0.42%. Latest LME aluminum stocks were down 3,625 mt at 4,799,850 mt.

Investors should stand on the sidelines before Fed President Bernanke delivers his testimony in the US Congress, while expectations for monetary easing are still held. LME aluminum is expected to test resistance at the 30-day moving average and move between USD 1,900-1,930/mt. The most active SHFE aluminum contract for October delivery should move within RMB 15,550-15,650/mt during light trading. Spot discounts of RMB 10-50/mt should be seen after the current-month SHFE aluminum contract shifts to August delivery. Trading will remain quiet as buyers dominate.

SMM Morning Review - 2012/7/17 Aluminum Market

Price Review & Forecast 11:04:49AM Jul 17, 2012 Source:SMM

SHANGHAI, Jul. 17 (SMM) -- Overnight U.S. June retail sales are down 0.5% MoM, much weaker than expected. Later the IMF lowered global economic growth forecast for 2013 to 3.9%, adding pressure on market confidence. However, the market focus immediately turned to Fed President’s testimony, which has triggered expectations of monetary easing. The sharp dive of the US dollar pushed commodity prices to rebound. LME aluminum dropped but closed higher during the European trading session, falling over 1% to USD 1,888.3/mt, and closing at the intraday high USD 1,917/mt, up USD 8/mt, or 0.42%. Latest LME aluminum stocks were down 3,625 mt at 4,799,850 mt.

Investors should stand on the sidelines before Fed President Bernanke delivers his testimony in the US Congress, while expectations for monetary easing are still held. LME aluminum is expected to test resistance at the 30-day moving average and move between USD 1,900-1,930/mt. The most active SHFE aluminum contract for October delivery should move within RMB 15,550-15,650/mt during light trading. Spot discounts of RMB 10-50/mt should be seen after the current-month SHFE aluminum contract shifts to August delivery. Trading will remain quiet as buyers dominate.