SMM Aluminum Weekly Price Review and Forecast (Mar. 17-21, 2014)

SHANGHAI, Mar. 17 (SMM) – SHFE 1406 aluminum contract prices opened lower early last week at RMB 13,095/mt, but then rebounded from technical support. Industrial value-added for the first two months of 2014, urban fixed-asset investment, and retail sales data from China all missed forecasts, fanning concerns over metal demand in China and prevented prices for the most active SHFE aluminum contract from rising above RMB 13,280/mt. In China’s physical markets, falling spot aluminum prices gave cargo holders little incentive to sell. Although SHFE aluminum prices rebounded, downstream producers still bought on an as-needed basis.  

In the coming week, LME aluminum prices should move lower to USD 1,710-1,770/mt, while SHFE 1406 aluminum contract prices should fluctuate in a RMB 13,100-13,300/mt range. In China’s spot markets, downstream producers will continue to purchase as needed. Weak SHFE aluminum prices and an increase in deliveries will leave spot discounts of RMB 200/mt over SHFE current-month aluminum contract prices.