SHANGHAI, Jun. 17 (SMM) – SHFE 1309 aluminum contract opened lower at RMB 14,680/mt on the first trading day following the Chinese Dragon Boat Festival, a 1.7% plunge, due to falling LME aluminum. The most active SHFE aluminum contract, however, did regain RMB 14,700/mt positive market fundamentals enticed short-covering and long-buying. That being said, any rising impetus was seen quite limited due to anemic trading activity.
Spot aluminum inventories continued to drop after the three-day holiday due to fewer shipments arriving over the holiday and growing demand for restocking, albeit at a slower pace. Production cuts at smelters also helped aluminum prices resist declines. Traders held offers firm, and some downstream producers purchased in modest amounts following the holiday break, keeping mainstream traded prices at a premium of more than RMB 20/mt over SHFE 1306 aluminum contract prices. However, tumbling SHFE aluminum dragged spot aluminum below RMB 14,800/mt, leaving market players cautious about future prices.