SHANGHAI, Mar. 5 (SMM) – China’s new control measures over domestic housing markets caused Chinese stock markets to plunge on Monday and sent LME aluminum down overnight. However, a weaker US dollar and rising Business Index in New York in February helped ease market concerns. As a result, LME aluminum recovered some of its earlier losses at the tail of trading, but upside space was limited as trading volumes contracted considerably. Finally, LME aluminum closed 0.10% higher at USD 1,976/mt. Latest LME aluminum inventories decreased 9,675 mt to 5,162,875 mt.
Aluminum prices will hover at low levels as markets are cautious. LME aluminum should continue to test support at USD 1,950/m and fluctuate in the band of USD 1,950-1,990/mt on Tuesday. SHFE 1306 aluminum contracts are likely to become the most active one, which should open at RMB 14,650/mt, with prices between RMB 14,600-14,680/mt. In spot markets, spot discounts of RMB 70-110/mt are expected on excess supply. Overall trading will be light.