SHANGHAI, Jan. 14 (SMM) – LME aluminum prices advanced 2% overnight, but prices of SHFE 1303 aluminum contracts failed to follow suit. The most active SHFE aluminum contract, which opened slightly higher at RMB 15,295/mt on January 11, stagnated at RMB 15,300/mt in the early session and later trimmed gains. Finally, the March aluminum on the SHFE closed at an intraday low of RMB 15,250/mt, down RMB 5/mt or 0.03%. Positions were down 236 lots to 62,258 lots. China’s CPI rebounded significantly in December. Monetary policy will remain tight in the short term against growing inflationary pressure, souring market sentiment and sending aluminum prices down. The most-traded SHFE aluminum contract should fluctuate between RMB 15,200-15,300/mt in the near term. Latest SHFE aluminum inventories were down 1,272 mt to 445,664 mt.
Spot aluminum was mainly traded at RMB 15,040-15,060/mt in Shanghai last Friday, with discounts at RMB 0-20/mt. Low-iron aluminum was traded at RMB 15,110-15,130/mt. SHFE aluminum prices rose much slower than LME aluminum prices as the rebound of China’s December CPI dashed hopes of monetary policy easing in the near term. Limited downstream restocking curbed upward momentum of spot aluminum prices, with mainstream traded prices down to RMB 15,040/mt. Overall trading was thin. In the afternoon, SHFE 1303 aluminum contract prices were little changed. Most traders remained anxious to sell in spot market, but there were few buyers, bringing traded prices down to 15,020-15,040/mt.