SHANGHAI, Jul. 19 (SMM) – While Fed President expressed worries toward the US economy, few new hint for further easing was made, pressing LME aluminum to a low of USD 1,886/mt and recording a six successive drop below USD 1,900/mt for the light metal. That has largely exposed the fact that support at USD 1,900/mt is quite weak. As seen in previous trading days, LME aluminum returned above USD 1,900/mt later, after the US Department of Commerce said new housing starts grew 6.9%, a four-year high, in June. The light metal closed down a slight USD 0.5/mt or 0.03% at USD 1,905.3/mt. Total positions plunged 12,000 lots as shorts closed their positions. Aluminum stocks at LME-bonded warehouses added 2,025 mt to 4,808,500 mt.
The weakening US dollar will help aluminum prices stabilize. LME aluminum should stay within USD 1,890-1,930/mt today. The most actively traded SHFE aluminum contract for October delivery is expected to open near RMB 15,560/mt and hover within RMB 15,500-15,875/mt. A breakthrough at the 60-day moving average is deemed unlikely for the moment. Spot discounts of RMB 20-60/mt will still be heard as supply stays more than demanded. Trading should remain light.
