SHANGHAI, Jul. 10 (SMM) – China’s CPI grew at a faster pace in June, while PPI fell for 16 months in a row. Growing inflationary pressure dashed hopes for any loosening in monetary policy. The International Monetary Fund (IMF) cut its forecast for global economic growth in 2013 and 2014 to 3.1% and 3.8% due to slowing economy in emerging countries, economic recession in the euro zone and possible ending of monetary stimulus in the US. The S&P downgraded Italy’s sovereignty credit rating from BBB+ to BBB. As a consequence, the euro fell against the US dollar, weighing base metals down. LME aluminum gave back gains during early European session and dipped below the 5-day moving average. Finally, LME aluminum closed at USD 1,793/mt, down USD 10/mt or 0.55%%. LME aluminum inventories added 13,700 mt to 5,433,575 mt, and positions also increased 3,701 lots to 769,925 lots.

Aluminum prices will extend losses as shorts dominate, with LME aluminum moving within USD 1,770-1,800/mt on Wednesday, and with SHFE 1310 aluminum contract fluctuating between RMB 14,160-14,260/mt after opening lower at RMB 14,250/mt. In spot market, trading will remain light, with spot discount of RMB 0-20/mt and premium of RMB 0-20/mt expected over SHFE 1307 aluminum contract prices.