SHANGHAI, Jun. 24 (SMM) – Falling LME aluminum caused SHFE 1310 aluminum contract to open RMB 125/mt lower at RMB 14,280/mt last Friday. SHFE aluminum for October delivery dipped to RMB 14,220/mt shortly after its opening, but hit a high of RMB 14,400/mt in the afternoon as LME aluminum tried to regain USD 1,800/mt and due to short-covering and dip-buying by longs. Finally, the most active SHFE aluminum contract closed down RMB 40/mt or 0.28% at RMB 14,365/mt. Trading volumes decreased 2,004 lots to 14,396 lots, and positions added 3,058 lots to 63,710 lots. SHFE aluminum for October delivery will not be able to break through RMB 14,400/mt until more upward momentum is available. SHFE aluminum inventories shrank 4,676 mt to 418,323 mt.
Mainstream traded prices for spot aluminum in Shanghai were RMB 14,410-14,430/mt, a discount of RMB 20-40/mt over SHFE 1307 aluminum contract prices. Low-iron aluminum was traded around RMB 14,570/mt. SHFE 1310 aluminum contract opened lower, driving a few traders to sell at near RMB 14,400/mt. However, the most active SHFE aluminum contract rebounded during spot aluminum trading session, leaving traders to hold to the sidelines. Downstream producers purchased in modest amounts and middlemen evinced higher buying interest after SHFE aluminum rebounded, helping mainstream traded prices hold firm at RMB 14,420/mt. However, downstream producers shied away from higher prices, causing spot discount to expand to RMB 40/mt. In the afternoon, despite rising SHFE aluminum, suppliers and buyers generally stayed out of the market out of growing pessimism over future prices, with sparse quotations seen at RMB 14,440-14,480/mt.