SMM Aluminum Market Morning Review (2014-3-27)

SHANGHAI, Mar. 27 (SMM) – LME aluminum crept higher to USD 1,762/mt after opening at USD 1,748/mt on Wednesday. Orders for durable goods in the US inched up 2.2% in February, but orders for non-defense capital goods factoring out aircrafts surprisingly dropped 1.3%. Meanwhile, tensions grew between the US and Russia over the Ukraine crisis, causing LME aluminum to fall back to USD 1,728.8/mt and end the day down USD 20.5/mt or 1.17% at USD 1,730/mt. Trading volumes contracted 4,888 lots to 10,561 lots, and positions also dropped 4,488 lots to 826,168 lots. 

On Tuesday night, SHFE 1406 aluminum contract moved lower to RMB 12,870/mt after starting at RMB 12,920/mt, and closed the session at RMB 12,880/mt. Trading volumes totaled 11,172 lots, and positions gained 696 lots to 117,946 lots.

The most active SHFE aluminum contract should fluctuate between RMB 12,830-12,900/mt on Thursday, absent positive news. In China’s physical market, spot discounts of RMB 300-340/mt are expected over SHFE 1404 aluminum contract prices.