SHANGHAI, Oct. 23 (SMM) – The EU summit’s failure to reach an agreement on debt rescue last week soured sentiment. In response, LME aluminum slid to a low of USD 1,951/mt during the European session, but had limited downside space as the US dollar index lacked upward momentum. Trading volumes and positions both contracted. Finally, LME aluminum closed at USD 1,965/mt, down USD 4.5/mt and proved resilient to declines compared with other base metals. Latest LME aluminum inventories were up by 23,750 mt to 5,062,875 mt.
Moody’s downgraded the credit rating of five Spanish regions, aggravating worries over the European debt crisis. LME aluminum should be pressured under the 5-day moving average and move between USD 1,940-1,980/mt on Tuesday. The SHFE 1212 aluminum contract is expected to open at RMB 15,430/mt on Tuesday, with prices between RMB 15,380-15,480/mt. Spot discounts are expected between RMB 60-110/mt due to persistent oversupply.