SHANGHAI, Jan. 7 (SMM) – China’s manufacturing activity pointed to expansion in December, giving a big boost to the Shanghai Composite Index, which ended the year 2012 up. The Shanghai Composite Index continued to rise on the first trading day after the New Year holiday, but later gave back some of the earlier gains due to strong resistance at 2,300 points. Despite strong LME aluminum prices and bullish stock market, SHFE aluminum prices failed to follow as longs were wary of buying at higher prices. SHFE 1303 aluminum contract prices briefly touched a high of RMB 15,420/mt last Friday after a high opening, but later tested support at RMB 15,300/mt as longs took profits.
In spot market, few traders and downstream producers entered the market on the last trading day of 2012 due to liquidity crunch. Sparse quotations were seen firm at RMB 15,070/mt. Spot trading resumed last Friday. The pullback of SHFE aluminum prices after initially hitting high dampened market sentiment and triggered strong wait-and-see sentiment. Traders held back goods to support aluminum prices stabilize at RMB 15,060/mt, but downstream stock rebuilding was limited, leaving overall trading limited both before and after New Year holiday.