SHANGHAI, Oct. 16 (SMM) – According to the US Department of Commerce, the US retail sales were up 1.1% MoM, beating forecasts and pushing up the US dollar index. However, risk aversion remained due to the slowing Chinese economy and the euro zone crisis. LME aluminum failed to hold onto the 60-day moving average in the European session due to high inventories and slid to USD 1,962.3/mt, nearly the lowest since early September. However, LME aluminum regained some losses at the tail of trading. Finally, LME aluminum ended the day down 13.5/mt or 0.68% at USD 1,973/mt. Latest LME aluminum inventories were down 4,625 mt to 5,064,950 mt.
The better-than-expected US retail sales will curb appetite for the US dollar as a safe heaven, thus supporting aluminum prices. LME aluminum should meet resistance at USD 1,990/mt on Tuesday, with prices between USD 1,960-1,990/mt. The SHFE 1212 aluminum contract is expected to open at RMB 15,450/mt and move between RMB 15,400-15,495/mt. Spot discounts will expand to RMB 80-110/mt since 1211 aluminum contract will become the current contract today. Trading should improve slightly as downstream producers and middlemen are expected to buy at low prices.