SMM Aluminum Market Morning Review (2014-4-23)

SHANGHAI, Apr. 23 (SMM) – US existing home sales in March and the Richmond Fed's manufacturing index for April both beat expectations, boosting market sentiment. As a result, LME aluminum rose to USD 1,892.5/mt after opening at USD 1,861.5/mt on Tuesday, and ended the day up USD 24/mt or 1.29% at USD 1,890/mt. Trading volumes added 1,923 lots to 11,237 lots, and positions were also up 2,102 lots to 87,513 lots. 

On Tuesday night, SHFE 1407 aluminum contract became the most active one, which dipped to RMB 13,315/mt after starting at RMB 13,340/mt. June aluminum on the SHFE, however, rebounded to RMB 13,385/mt afterwards before finishing the night session at RMB 13,380/mt. Trading volumes totaled 9,866 lots, and positions added 1,454 lots to 110,288 lots.

Optimism over HSBC’s flash China manufacturing PMI for April should push the most active SHFE aluminum contract up to RMB 13,360-13,400/mt on Wednesday. In China’s physical market, sellers will hold offers firm, while demand will pick up, which will help narrow spot discounts over SHFE 1405 aluminum contract to RMB 100-140/mt.