SHANGHAI, Mar. 7 (SMM) – Base metals consumption in China was tepid, and the euro zone revised its 4Q GDP to -0.9%, offsetting positive news from forecast-beating US ADP employment in February. As such, the US dollar index climbed to 82.604 overnight, causing LME aluminum to tumble below USD 1,950/mt to the lowest for the year. Positions surged by 6,666 lots due to massive short selling. Finally, LME aluminum closed 1.09% lower at USD 1,956/mt. Latest LME aluminum inventories increased 25,225 mt to 5,187,925 mt.
A firm US dollar will weigh down aluminum prices. LME aluminum should stagnate around USD 1,950/mt and fluctuate in the band of USD 1,930-1,980/mt on Thursday. SHFE 1306 aluminum contract prices are expected to open lower at RMB 14,800/mt, with prices between RMB 14,750-14,850/mt. Trading should be thin in spot markets, with spot discounts expected between RMB 80-120/mt.