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SMM Aluminum Market Morning Review (2013-7-2)
Jul 2,2013 09:23CST
price review forecast
China’s manufacturing PMI fell to 50.1 in June as expected, but still stayed above 50.

SHANGHAI, Jul. 2 (SMM) – China’s manufacturing PMI fell to 50.1 in June as expected, but still stayed above 50. Manufacturing PMI in the euro zone rose to 48.8, suggesting economy in the region is improving. The US manufacturing PMI jumped to 50.9 from unexpected contraction in May. Market sentiment was boosted as global manufacturing improved and as liquidity crunch in China is fading. LME aluminum was stagnant at USD 1,785/mt during early hours of the European session as inventories hit a new record high of 5.45 million mt, but later touched a high of USD 1,826/mt as upbeat US economic figures forced shorts to exit the market. Finally, LME aluminum closed up USD 49/mt or 2.76% at USD 1,824/mt. LME aluminum inventories added 14,575 mt to 5,450,175 mt, but positions were off 5,965 lots to 750,803 lots. 

Aluminum prices will extend gains today on positive US manufacturing PMI. LME aluminum will test resistance at the 20-day moving average and move within USD 1,800-1,845/mt on Tuesday. SHFE 1310 aluminum contract is expected to open higher at RMB 14,390/mt, with prices between RMB 14,350-14,450/mt. In spot market, traders will hold to the sidelines against rising aluminum prices, and downstream producers will purchase as needed, with spot discount of RMB 0-30/mt and premium of RMB 0-10/mt expected over SHFE 1307 aluminum contract prices. 

latest LME aluminum prices
SHFE aluminum prices

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