SMM Aluminum Market Daily Review (2014-4-21)

SHANGHAI, Apr. 22 (SMM) – Last Friday night, SHFE 1406 aluminum contract was range-bound after starting at RMB 13,230/mt, and finished the night session flat with the opening price. Trading volumes totaled 952 lots, and positions added 62 lots to 114,216 lots. On Monday, the most active contract remained range-bound, closing the day at RMB 13,200/mt. Trading volumes totaled 7,960 lots, and positions fell 2,002 lots to 112,214 lots. 

Spot aluminum largely traded at RMB 12,970-12,980/mt in Shanghai and Wuxi, and RMB 12,970-12,990/mt in Hangzhou on Monday. Downstream producers in general purchased as needed. In the afternoon, offers were little changed, and a few transactions were concluded.

SMM surveyed 40 large aluminum smelters and traders in China.

Half of the market players surveyed have painted a rosy picture of this week’s spot aluminum prices, believing prices will break through the RMB 13,000/mt mark. First, LME aluminum has found strong support at the 10-day moving average, with prices expected between USD 1,850-1,900/mt. Second, SHFE 1406 aluminum contract is set to move higher to RMB 13,200-13,300/mt. Third, growing demand from downstream producers and traders will inject rising impetus to spot aluminum prices.      

The remaining market participants see spot aluminum prices little changed between RMB 12,960-13,000/mt this week. First, relatively quiet macro front will keep LME aluminum in check within USD 1,850-1,880/mt and leave the most active SHFE aluminum contract fluctuating between RMB 13,160-13,260/mt. Second, downstream producers will refrain from buying once spot aluminum prices climb above RMB 13,000/mt.