SMM Aluminum Market Daily Review (2012-10-26)

SHANGHAI, Oct. 29 (SMM) – The SHFE 1212 aluminum contract opened slightly lower at RMB 15,370/mt on October 26. In the afternoon session, the three-month contract expanded losses along with other base metals to a low of RMB 15,305/mt. The most-traded aluminum contract on the SHFE regained some losses at the tail of trading before finally closing at RMB 15,330/mt, down RMB 60/mt or 0.39%. Positions were down 880 lots 55,890 lots. The Shanghai Composite Index retreated below 2,100 points again, souring sentiment. Market was awaiting guidance from the US 3Q GDP last Friday night. Trading should remain bleak in SHFE aluminum market and the contract for December delivery is expected to test support at RMB 15,300/mt. Latest SHFE aluminum inventories increased by 10,879 mt to 445,242 mt.  

Spot aluminum was mainly traded between RMB 15,220-15,240/mt in Shanghai last Friday, with discounts between RMB 90-70/mt. Low-iron aluminum was traded between RMB 15,280-15,300/mt. SHFE 1212 aluminum contract prices extended losses, fueling bearish sentiment in spot aluminum market. Cargo holders became less willing to move goods at lower prices, while downstream consumption remained sluggish, causing mainstream traded prices to fall to year’s low of RMB 15,220/mt. Spot aluminum prices should test support at RMB 15,200/mt due to weak fundamentals. In the afternoon, the most active SHFE aluminum contract dropped further, fueling strong bearish mood in spot aluminum market. Some traders, who were eager to move goods, lowered offers to RMB 15,200-15,210/mt, but inquiries were rarely heard, leaving trading extremely quiet.