SMM Aluminum Weekly Price Review and Forecast (Jun. 16-20, 2014)

SHANGHAI, Jun. 16 (SMM) – Last week, SHFE 1408 aluminum contract prices fell from RMB 13,845/mt to RMB 13,400/mt as the probe into metal financing fraud at the Port of Qingdao kept investors cautious. In China’s physical markets, downstream consumption remained sluggish, causing spot discounts to expand. Some speculators entered the market since higher spot discounts created opportunities for arbitrage.  

This coming week, instability in Iraq and recent negative economic data, as well as bearish technical indicators, will send LME aluminum prices down to USD 1,810-1,870/mt. Prices for the most active SHFE aluminum contracts should have little room to fall due to strong support at the long-term moving average, with prices expected between RMB 13,300-13,500/mt. In China’s spot markets, spot discounts are expected to widen to RMB 110-160/mt over SHFE 1407 aluminum contracts.