SMM Aluminum Market Daily Review (2013-1-18)

SHANGHAI, Jan. 21 (SMM) – SHFE 1303 aluminum contract prices opened slightly higher at RMB 15,190/mt on January 18. The contract struggled at RMB 15,170/mt in the session, with strong resistance at RMB 15,200/mt as longs and shorts mostly exited the market. Finally, the March aluminum on the SHFE closed at RMB 15,190/mt, up RMB 55/mt or 0.36%. Positions were down 1,656 lots to 59,004 lots. Markets remained cautious as China’s economic data failed to cheer investors up. Weak fundamentals eroded gains of SHFE aluminum prices. The most-traded SHFE aluminum contract is expected to hover at RMB 15,150/mt this week. Latest SHFE aluminum inventories were down 5,197 mt to 440,467 mt.

Spot aluminum was mainly traded at RMB 14,940-14,970/mt in Shanghai last Friday, with discounts at RMB 110-130/mt. Low-iron aluminum was traded at RMB 15,050-15,060/mt. China’s 4Q GDP was in line with market expectations, failing to pushing SHFE 1303 aluminum contract prices up appreciably. Some small and medium downstream producers have already closed early for Chinese New Year, causing demand to decline. Cargo holders were eager to sell, causing spot discounts to expand to RMB 130/mt. Prices of some high-quality brand aluminum ingot were firm at RMB 14,970/mt. In the afternoon, prices of the most active SHFE aluminum contracts remained weak. A few cargo holders were eager to sell, with offers at RMB 14,940-14,950/mt. Downstream producers and middlemen seldom entered the market, leaving overall trading muted.