SHANGHAI, Oct. 17 (SMM) – The US industrial production and capacity utilization for September beat forecasts and the US home builders’ confidence for October jumped to a fresh six-year high. Meanwhile, expectations are running high that Spain may apply for secure rescue fund soon, pushing up the euro and driving down the US dollar index to 79. However, LME aluminum inventories didn't decrease and consumption of spot aluminum was sluggish. LME aluminum met resistance at the 60-day moving average and sank to a low of USD 1,946/mt. LME aluminum rebounded a little at the tail of trading before finally ending the day down USD 15/mt or 0.76% at USD 1,958/mt. Latest LME aluminum inventories increased by 850 mt to 5,065,800 mt.
With the EU summit coming up soon, market is expecting that Spain will apply for rescue fund. Eased selling pressure will support aluminum prices. LME aluminum should meet resistance at USD 1,980/mt and move between USD 1,940-1,980/mt on Wednesday. The SHFE 1212 aluminum contract is expected to open at RMB 15,450/mt on Wednesday, with prices between RMB 15,400-15,495/mt as thin trading will curb its upward momentum. Spot discounts are expected between RMB 80-110/mt as traders should show higher intention of moving goods while downstream consumption will be sluggish.