SMM Aluminum Market Daily Review (2012-10-17)

SHANGHAI, Oct. 18 (SMM) - The SHFE 1212 aluminum contract opened at RMB 15,455/mt on Wednesday, moving narrowly at low prices for three consecutive trading days. Shorts and longs showed higher interest in entering the market, though trading volumes were limited. Finally, the most active contract closed at RMB 15,455/mt, down RMB 5/mt. Positions were up by 242 lots to 59,134 lots. Investors are staying guarded ahead of China’s GDP for 3Q to be released on Thursday. With fundamentals being weak, SHFE aluminum prices will extend losses if China’s 3Q GDP misses forecasts. The three-month contract is expected to lose support at RMB 15,400/mt.

Spot aluminum was mainly traded between RMB 15,280-15,300/mt in Shanghai on Wednesday, with discounts between RMB 80-100/mt. Low-iron aluminum was traded between RMB 15,350-15,360/mt. The SHFE 1212 aluminum contract was mired, dampening sentiment in spot aluminum market. Mainstream traded prices met strong resistance at RMB 15,300/mt. Supply was ample, while downstream producers generally watched from the sidelines, depressing overall trading. In the afternoon, the current-month contract saw little movement. Sparse quotations were reported between RMB 15,280-15,290/mt. Wait-and-see sentiment was strong among sellers and buyers, leaving trading light.