SMM Aluminum Market Morning Review (2013-10-25)

SHANGHAI, Oct. 25 (SMM) – LME aluminum started Thursday at USD 1,845.5/mt. The light metal climbed to USD 1,853/mt as HSBC’s flash China manufacturing PMI for October hit a 7-month high of 50.9, but retreated slightly later in the day due to higher-than-expected US initial jobless claims in the week ending October 19. LME aluminum, however, did hit an intraday high of USD 1,863.8/mt at the tail of the session before closing USD 19.8/mt or 1.07% higher at USD 1,863.3/mt. Trading volumes contracted 2,691 lots to 9,769 lots, but positions added 2,145 lots to 740,367 lots.

Despite upbeat HSBC’s China manufacturing PMI, worries over US economic growth will temper gains of aluminum prices. SHFE 1401 aluminum contract, the most active one, is expected to open at RMB 14,390/mt on Friday and fluctuate between RMB 14,360-14,410/mt. In spot markets, a discount of RMB 0-10/mt and a premium of RMB 0-30/mt are expected over SHFE 1311 aluminum contracts.