SMM Aluminum Market Morning Review (2013-1-14)

SHANGHAI, Jan. 14 (SMM) – China’s December CPI was up 2.5% YoY, a 7-month high, dashing hopes for monetary policy easing in the short term. The trade deficit in the US was USD 48.73 billion in November, its highest since March 2012. As a result, LME aluminum prices fell and lost support at USD 2,100/mt at the tail of trading. Finally, LME aluminum finished at USD 2,099.8/mt, down USD 20.3/mt or 0.96%. Latest LME aluminum inventories decreased 11,425 mt to 5,180,475 mt.

Bearish sentiment will continue to weigh on aluminum prices. LME aluminum should struggle at USD 2,100/mt and fluctuate in the band of USD 2,080-2,110/mt on Monday. The SHFE 1303 aluminum contract is expected to open lower at RMB 15,250/mt, with prices between RMB 15,200-15,295/mt. Traders will actively move goods as the delivery date of the current-month contracts approaches, with spot discounts expected between RMB 0-20/mt and premiums between RMB 0-20/mt. Downstream producers will take a wait-and-see stance at the beginning of the week and overall trading should be light.