SMM Aluminum Market Daily Review (2012-10-18)

SHANGHAI, Oct. 19 (SMM) – The SHFE 1212 aluminum contract opened slightly higher at RMB 15,510/mt on Thursday. The most active contract hovered near RMB 15,500/mt in the session as longs and shorts exited the market after taking profits. Finally, the three-month contract gained RMB 65/mt to close at RMB 15,510/mt. Positions were down 1,276 lots to 57,858 lots. China’s 3Q GDP was line with expectations, but uncertainty on whether the Chinese economy has hit bottom soured sentiment. The most-traded contract rose above RMB 15,500/mt, but support at the mark should be very weak. 

Spot aluminum was mainly traded between RMB 15,310-15,350/mt in Shanghai on Thursday, with discounts between RMB 70-110/mt. Low-iron aluminum was traded between RMB 15,390-15,400/mt. The most active SHFE aluminum contract rose steadily as China’s 3Q GDP was in line with expectations. Spot aluminum prices climbed above RMB15,300/mt as a result. Cargo holders generally moved goods at discounts of less than RMB 100/mt, with prices for some deliverable brand aluminum firm at RMB 15,350/mt. Downstream producers purchased only modestly at lower prices, dragging traded prices to RMB 15,310/mt. In the afternoon, the SHFE 1212 aluminum contract edged up, but bearish sentiment was strong in spot market due to sluggish consumption. Quotations were lowered to RMB 15,300-15,320/mt, while downstream producers and middlemen showed little buying interest, leaving trading light.