SHANGHAI, Oct. 11 (SMM) – The SHFE 1212 aluminum contract gapped lower at RMB 15,565/mt on Wednesday due to the decline of LME aluminum. The most active contract briefly climbed to a high of RMB 15,600/mt, but later sank to RMB 15,535/mt. Liquidation by longs dominated the market. Finally, the three-month contract closed down RMB 100/mt or 0.64% at RMB 15,540/mt. Positions were down 2,872 lots to 62,166 lots. SHFE aluminum prices dropped as longs retreated from the market due to risk aversion, despite limited short selling. The contract for December delivery is expected to fall to RMB 15,500/mt in the short term.
Spot aluminum was mainly traded between RMB 15370-15400/mt in Shanghai on Wednesday, with discounts between RMB 30-0/mt. Low-iron aluminum was traded between 15440-15460/mt. The most active SHFE aluminum contract extended losses, while the current-month contract failed to hold onto RMB 15,400/mt. Quotations for some deliverable brand aluminum ingot were almost flat with the current-month contract due to the approaching delivery date, but most traders moved goods at discounts of RMB 20/mt. Downstream producers purchased only limitedly at low prices as they were bearish towards aluminum prices, leaving trading extremely light. In the afternoon, the current-month contract was mired under RMB 15,400/mt. A few traders held quotations firm at RMB 15,370-15,380/mt, but inquiries were rarely heard among downstream producers and middlemen, leaving trading quiet.