SHANGHAI, Mar. 4 (SMM) - Price declines in SHFE 1305 aluminum contracts slowed down last week, but any upward momentum was limited. Prices for the most active SHFE aluminum contracts met resistance at the upper end RMB 14,900/mt, while the lower end price fell to RMB 14,700/mt and with trading volumes decreasing by nearly half. SHFE aluminum for May delivery should continue to hover at current low levels as longs and shorts were cautious about entering markets.
Spot aluminum prices were stagnant at RMB 14,500/mt even as traders held back goods to support prices early last week. Downstream demand was extremely soft following the Lantern Festival, however, with only middlemen purchasing modestly at low prices. Growing oversupply pressure kept aluminum prices in check. Later in the week, SHFE aluminum prices losses grew, driving spot aluminum prices below RMB 14,500/mt. Consumption was sluggish as liquidity crunch bit in at the month’s end.
In the coming week, LME aluminum prices will not likely hold the USD 2,000/mt mark, while SHFE 1305 aluminum contract prices will meet growing resistance at RMB 14,700/mt. Spot aluminum prices should struggle at RMB 14,400/mt, with spot discounts expected to narrow to RMB 80/mt. Trading activity will remain light as oversupply pressure grows.