SMM Aluminum Market Daily Review (2012-10-16)

SHANGHAI, Oct. 17 (SMM) - The SHFE 1212 aluminum contract opened lower at RMB 15,420/mt on Tuesday. Trading volumes were less than 4,000 lots due to extremely thin trading activity. The most active contract was pressured under the 5-day moving average before finally closing at RMB 15,460/mt, up RMB 15/mt or 0.10%. Positions were down 830 lots to 58,892 lots. The Shanghai Composite Index failed to close at 2,100 points due to a lack of confidence. The three-month contract narrowed losses, but had no upward momentum to rebound. The contract for December delivery is expected to hover above RMB 15,400/mt while awaiting guidance from China’s GDP for 3Q.

Spot aluminum was mainly traded between RMB 15,290-15,310/mt in Shanghai on Tuesday, with discounts between RMB 80-100/mt. Low-iron aluminum was traded between RMB 15,360-15,370/mt. The gains of the SHFE 1212 aluminum contract were limited, while the current-month 1211 aluminum contract was pressured under RMB 15,400/mt, weakening rising momentum of spot aluminum and causing spot discounts to expand to RMB 100/mt. Downstream producers and middlemen were actively buying at prices below RMB 15,300/mt Bearishness remained, but trading improved slightly from a day earlier. In the afternoon, the most active SHFE aluminum contract was mired. Sparse quotations were firm at RMB 15,300/mt in spot aluminum market. Downstream producers and middlemen mostly stood on the sidelines, leaving trading quiet.