SHANGHAI, Apr. 28 (SMM) - SHFE 1306 aluminum contract prices moved within a RMB 14,510-14,590/mt price range early this week. SHFE 1307 aluminum contract became the most active one on Thursday, with its the low-end price rising to RMB 14,600/mt but failing to break through RMB 14,700/mt as longs and shorts exited the market before the May Day holiday.
Spot aluminum in Shanghai climbed from RMB 14,400/mt to RMB 14,450/mt this past week, thanks to slowing inventory growth in east China and modest restocking downstream ahead of the three-day May Day holiday. Downstream producers, however, lost interest when prices rose further, leaving spot discounts at RMB 100/mt. Overall trading picked up some.
There will only be two trading days in China next week due to the three-day May Day holiday, with selling at highs and short-covering likely to keep aluminum prices within a tight price range in the coming week. LME aluminum prices will struggle at USD 1,900/mt, and prices for the most active SHFE aluminum contracts will hover around RMB 14,600/mt. Spot discounts of RMB 70-110/mt are expected over SHFE 1305 aluminum contract prices since more goods will arrive after the holiday and since downstream restocking will be limited.