SHANGHAI, Jun. 10 (SMM) – Prices for the most active SHFE aluminum contract continued to underperform LME aluminum prices, falling below the RMB 13,500/mt mark, but finding solid base support. Most investors stayed on the sidelines due to trading suspension for the three-day Dragon Boat Festival holiday and the ongoing probe at Qingdao port. Traded volumes were down sharply last week by 300,000 lots. The most active SHFE aluminum contract is set to test support this week at the 60-day moving average and move largely between RMB 13,300- 13,500/mt, with negative technical indicators.
In China’s physical aluminum markets, cargo holders did not move goods in large amounts even after SHFE aluminum prices moved lower, limiting the downside room for spot aluminum prices. Downstream producers were still reluctant to purchase goods, but some middlemen entered the market at prices below RMB 13,200/mt. Trading in general was quiet. Downstream producers continued to purchase goods only on an as-needed basis following the Dragon Boat Festival holiday early last week, while cargo holders also confronted difficulties in raising prices. Physical aluminum should trade this week at a discount of RMB 20-70/mt over prices for the SHFE front-month aluminum contract despite the arrival of the delivery date.