SHANGHAI, Jun. 6 (SMM) – SHFE 1309 aluminum contract opened slightly higher at RMB 14,895/mt on Wednesday. In the morning session, the most active SHFE aluminum contract failed to break through RMB 14,900/mt on lackluster trading activity, but its downside space was seen limited, though, with the low-end price at RMB 14,870/mt. In the afternoon session, SHFE aluminum for September delivery bounced back as shorts exited after LME aluminum led gains. Finally, SHFE 1309 aluminum contract closed at an intraday high of RMB 14,970/mt, up RMB 115/m or 0.77%. Positions decreased 1,194 lots to 47,558 lots. The most active SHFE aluminum contract is expected to challenge RMB 15,000/mt as spot aluminum supply is tight and as LME aluminum recorded a 7-day winning streak.
Spot aluminum was traded at RMB 14,850-14,860/mt in Shanghai on Wednesday, a discount of RMB 0-10/mt and premium of RMB 0-10/mt over SHFE 1306 aluminum contract prices. Low-iron aluminum was traded around RMB 14,980/mt. The high-end SHFE 1306 aluminum contract prices rose, allowing traders to hold offers level with SHFE current-month aluminum contract prices. Downstream producers began to restock modestly for the upcoming Chinese Dragon Boat Festival and middlemen were also active in buying, keeping mainstream traded prices stable at RMB 14,850/mt. Overall trading picked up slightly from a day earlier. In the afternoon, the most active SHFE aluminum contract staged a strong rally, driving traders to hike quotes from RMB 14,860/mt to RMB 14,880/mt. Middlemen shied away from higher prices, leaving trading muted.