SHANGHAI, Oct. 21 (SMM) – SHFE 1310 aluminum contract prices rose by RMB 5/mt last Monday before falling by over RMB 200/mt the next day. Prices for SHFE 1311 aluminum contracts, which shifted to the new current-month contracts last Wednesday, were also weak, hovering near RMB 14,440/mt. Falling LME aluminum prices and SHFE current-month aluminum contract prices sent SHFE 1312 aluminum contract prices down below the 5-day and 10-day moving averages to RMB 14,315/mt. Prices for the most active SHFE aluminum contracts ended last week down RMB 100/mt, or 0.69%.
Spot aluminum prices in east China broke through RMB 14,600/mt last Monday before following SHFE aluminum down RMB 120/mt to RMB 14,440-14,460/mt. Prices in Wuxi were at a considerable contango over SHFE current-month aluminum contracts, while a high backwardation was reported in Shanghai where supply was tighter. Lower prices failed to stoke much buying interest, though.
Investors will stay cautious due to economic losses caused by the temporary US government shutdown and ahead of the release of US non-farm employment data and manufacturing PMI this week. This will hold LME aluminum prices in check within a USD 1,830-1,880/mt range. With only limited economic results expected to be announced in China, SHFE aluminum prices will track movements of LME aluminum prices, with SHFE 1312 aluminum contract prices expected between RMB 14,300-14,500/mt. SHFE 1401 aluminum contracts may become the most active contract this week.