SMM Aluminum Market Daily Review (2013-3-29)

SHANGHAI, Apr. 1 (SMM) – SHFE 1306 aluminum contract started the day lower at RMB 14,600/mt last Friday. The contract sank to a low of RMB 14,550/mt, but later recovered some losses and stayed above RMB 14,600/mt thanks to short-covering. Finally, the most active aluminum contract finished RMB 35/mt or 0.24% lower at RMB 14,610/mt. Positions decreased 1,194 lots to 93,398 lots. Without guidance from LME aluminum, the low-end SHFE aluminum dropped further. Trading activity should remain depressing this week, so SHFE aluminum for June delivery is expected to struggle at RMB 14,600/mt.

Spot aluminum was mainly traded at RMB 14,440-14,480/mt in Shanghai last Friday, a discount of RMB 40-80/mt over SHFE 1304 aluminum contract prices. Low-iron aluminum was trade around RMB 14,640/mt. SHFE 1306 aluminum contract prices rose after a low opening, but spot aluminum in east China fell below RMB 14,500/mt. A small number of traders in Shanghai lowered offers to RMB 14,440/mt in order to generate cash, widening price spread between goods of different brands. Downstream producers and middlemen evinced little buying interest against tight cash flows on the last trading day of the quarter, leaving overall trading light. In the afternoon, the upside space of SHFE 1304 aluminum contract prices was limited. Sparse quotations were reported at RMB 14,450-14,460/mt, but inquiries were rarely heard due to tight liquidity.