SHANGHAI, Jun. 26 (SMM) – The People’s Bank of China (PBOC) said yesterday it will closely monitor short-term liquidity crunch, easing market worries. This helped China’s A-shares rebound following sharp declines earlier. The US durable goods orders rose 3.6% MoM in May. Home prices in major cities in the US grew 12.1% in April. Meanwhile, US Consumer Confidence Index advanced to 81.4 in June, the highest since January 2008. These positive data suggest sustained recovery in the US economy, but also pushed the US dollar index up. LME aluminum inventories broke through 5.445 million mt overnight, keeping aluminum prices in check. LME aluminum rose to USD 1,775/mt during early European session, and was then pushed up by strong US economic indicators to USD 1,801.5/mt. However, LME aluminum pared gains at the tail of session due to sell-off at highs, and finally closed up USD 8/mt or 0.45% at USD 1,778/mt. LME aluminum inventories increased 4,950 mt to 5,445,275 mt, but positions decreased 850 lots to 759,236 lots.
The light metal will climb mildly as market concerns eased. LME aluminum should rise to test resistance at USD 1,800/mt and move within USD 1,770-1,800/mt on Wednesday. The most active SHFE aluminum contract is expected to open higher at RMB 14,300/mt, with prices between RMB 14,260-14,360/mt. In spot market, trading will be light due to tightening liquidity, with spot discount of RMB 0-40 expected over SHFE 1307 aluminum contract prices.