SHANGHAI, Oct. 9 (SMM) – Unimproved domestic metal consumption after the Chinese holidays and downbeat manufacturing PMI for September exacerbated concerns over China’s economic slowdown. Furthermore, worries over the European debt crisis grew as no progress has been made in providing aid to the Spain. In this context, global stock market fell, pushing the US dollar index higher. LME aluminum prices sank to a low of USD 2,071/mt overnight and resistance at USD 2,100/mt was turning stronger. LME aluminum lacked upward momentum necessary to rebound due to short selling. Finally, LME aluminum ended the day down USD 29/mt or 1.38% to close at USD 2,078/mt. Latest LME aluminum inventories were down 8,650 mt to 5,024,350 mt.
Aluminum prices are expected to move weakly due to apprehension over the global economic slowdown. LME aluminum should test support at the 30-day moving average, with prices between USD 2,060-2,100/mt on Tuesday. The SHFE 1212 aluminum contract is expected to open lower at RMB 15,630/mt on Tuesday and move between RMB 15,580-15,680/mt. Trading activities should be thin in spot market due to high inventories. Spot discounts are expected between RMB 60-40/mt as cargo holders will hold quotations firm at the beginning of the month.