SMM Aluminum Market Daily Review (2013-6-28)

SHANGHAI, Jul. 1 (SMM) – SHFE 1310 aluminum contract opened lower at RMB 14,240/mt last Friday. The most active SHFE aluminum contract sank to RMB 14,160/mt shortly after its opening, but later regained this mark. Despite the rally in A-shares, SHFE 1310 aluminum contract had little upward momentum, and finally closed at RMB 14,215/mt, down RMB 55/mt or 0.39%. Trading volumes contracted 1,748 lots to 4,964 lots, but positions increased 1,302 lots to 71,750 lots. Tightness in liquidity will ease next week, but worries over China’s economic outlook remain, which will undermine any potential towards a rebound in aluminum prices, with SHFE aluminum for October delivery expected to test support at RMB 14,200/mt. SHFE aluminum inventories were off 18,022 mt to 400,301 mt.  

Mainstream traded prices for spot aluminum in Shanghai were RMB 14,370-14,390/mt on Friday, RMB 10-30/mt higher than SHFE 1307 aluminum contract prices. Low-iron aluminum was traded around RMB 14,530/mt. Spot aluminum market was quiet due to liquidity crunch at the end of mid-year mark. Traders were reluctant to sell at lows, leaving prices stagnant at RMB 14,380/mt. In the afternoon, a few traders held offers firm at RMB 14,380-14,390/mt even as buying interest was tepid.