SMM Aluminum Market Daily Review (2012/10/9)

SHANGHAI, Oct. 10 (SMM) – The SHFE 1212 aluminum contract opened slightly higher at RMB 15,685/mt, but later failed to rise along with other base metals. The most active contract expanded losses at the tail of trading before finally closing down RMB 40/mt or 0.26% at RMB 15,615/mt. Positions were down 594 lots to 65,014 lots. Longs exited the market by profit-taking as spot aluminum consumption failed to recover after the Chinese holidays. With the current-month contract dropping sharply, support at RMB 15,600/mt is expected be weak for the three-month contract in the near term. 

Spot aluminum was mainly traded between RMB 15,430-15,450/mt in Shanghai on Tuesday，with discounts between RMB 50-30/mt. Low-iron aluminum was traded at RMB 15,510-15,520/mt.The decline of the current-month contract dragged down spot aluminum prices. Downstream producers and middlemen build stocks mildly, while cargo holders held prices firm at RMB 15,440/mt, helping spot discounts to narrow within RMB 50/mt. Still, some traders lowered prices to cash in. Trading improved from a day earlier. In the afternoon, the SHFE current-month contract prices dropped, but selling interest was low due to the strong wait-and-see sentiment in spot aluminum market. Sparse quotations were flat with the current-month contract at RMB 15,430-15,440/mt. A few middlemen purchased deliverable brand aluminum ingot at low prices, but supply was limited, leaving trading light.