SHANGHAI, Feb. 22 (SMM) – SHFE 1305 aluminum contract, the most active one, gapped lower at RMB 15,010/mt on February 21. The contract dived to RMB 14,900/mt as massive shorts entered the market. In the afternoon, the light metal recovered some losses, thanks to buying from large aluminum enterprises including Aluminum Corporation of China and China Power Investment. Finally, SHFE aluminum for May delivery ended the day down RMB 125/mt or 0.83% at RMB 14,965/mt. Positions were up 5,276 lots to 88,532 lots. A 3% decline in the Shanghai Composite Index triggered strong bearish sentiment. Shorts should continue to dominate the market, which will cap the most-traded SHFE aluminum contract under RMB 15,000/mt in the short term.
Spot aluminum was mainly traded at RMB 14,550-14,570/mt in Shanghai on Thursday, with discounts at RMB 130-150/mt. Low-iron aluminum was traded around RMB 14,660/mt. SHFE 1305 aluminum contract prices lost more than 1%, causing spot aluminum prices to slid RMB 150/mt to RMB 14,550/mt. Spot discounts narrowed slightly, but traders remained active in moving goods. Downstream producers and middlemen refrained from entering markets, leaving trading muted. In the afternoon, some traders lowered offers to RMB 14,530/mt. A mild rally in SHFE aluminum contracts for May delivery attracted middlemen to go bargain-hunting, allowing traders to raise quotations to RMB 14,560/mt, but overall trading was extremely thin.