SHANGHAI, Jun. 7 (SMM) – SHFE 1309 aluminum contract opened only RMB 15/mt higher at RMB 14,925/mt on Thursday. The most active SHFE aluminum contract sank to RMB 14,840/mt shortly after its opening as longs closed positions against depressed economic outlook. Later, SHFE aluminum for September delivery rebounded as shorts exited to avoid risks ahead of the upcoming three-day holiday in China, but still failed to break through RMB 15,000/mt as positions fell as much as 5,844 lots. Finally, SHFE aluminum for delivery in four months closed flat with yesterday at RMB 14,910/mt. Today is the last trading day before the Chinese Dragon Boat Festival. Markets are now eyeing US May non-farm payrolls. Investors should continue to pull out of the market during the Asian trading session to avert risks. In this context, SHFE aluminum for September delivery is expected to hover near RMB 14,900/mt today.
Spot aluminum was traded at RMB 14,920-14,940/mt in Shanghai on Thursday, 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 15,050/mt. SHFE aluminum prices rose, with SHFE 1306 aluminum contract prices sustaining a 10-day winning streak. This allowed traders to hold prices flat with SHFE current-month aluminum contract prices, sending spot aluminum in east China up to RMB 14,900/mt, a 4-month high. Downstream producers restocked in modest amounts as the Chinese Drag Boat Festival is approaching, while middlemen went bargain hunting. This, coupled with tight aluminum supply, pushed prices up further. Trading was brisk at RMB 14,930/mt. Market activity should remain brisk today. In the afternoon, SHFE 1309 aluminum contract inched down, weakening market optimism. Some traders cut offers from RMB 14,930/mt to RMB 14,910/mt, but most buyers stood on the sidelines, except for a small number of middlemen who went bargain hunting.