SHANGHAI, Jan. 17 (SMM) – SHFE 1303 aluminum contract prices opened at RMB 15,150/mt on January16. Prices of the most active SHFE aluminum contracts fell back to near RMB 15,150/mt after initially rising, with strong resistance at RMB 15,200/mt, but found strong support at RMB 15,130/mt. Most longs and shorts exited the market, causing positions to drop 2,532 lots to 61,522 lots. Finally, the March aluminum on the SHFE shed RMB 5/mt or 0.03% to close at RMB 15,155/mt. The Shanghai Composite Index was in correction and LME aluminum prices trended down, souring market sentiment. As a result, investors chose to stand on the sidelines prior to the release of 4Q GDP due Friday. The most-traded SHFE aluminum contract should be capped under RMB 15,200/mt in the near term.
Spot aluminum was mainly traded at RMB 14,950-14,980/mt in Shanghai on Wednesday, with discounts at RMB 100-120/mt. Low-iron aluminum was traded at RMB 15,080-15,090/mt. SHFE 1303 aluminum contract prices fell back after rising slightly, dampening market confidence. Spot discounts expanded above RMB 100/mt after SHFE 1302 aluminum contracts became the current-month contract. Some cargo holders were anxious to sell due to high inventories, but downstream producers refrained from buying at highs, curbing gains of spot aluminum prices, with the lowest traded price down to RMB 14,950/mt. Overall trading was down sharply. In the afternoon, prices of the most active SHFE aluminum contracts dropped further. Cargo holders were in a hurry to sell, lowering offers to RMB 14,940-14,950/mt. Downstream producers and middlemen rarely purchased since they were bearish towards future prices, leaving overall trading muted.