SMM Aluminum Market Morning Review (2014-6-24)

SHANGHAI, Jun. 24 (SMM) – Three-month aluminum on the London Metal Exchange opened at USD 1,886.3/mt on Monday before advancing to USD 1,903.5/mt, driven by encouraging economic data out of China and the US. HSBC’s flash China manufacturing PMI for June hit 50.8 as the country’s mild stimulus measures are delivering results. Markit’s flash US manufacturing PMI for June also rose. The light metal, however, fell back afterwards on negative composite PMI from the euro zone, closing the day at USD 1,887/mt. Trading volumes contracted 3,329 lots to 8,411 lots, with positions up 2,963 lots to 889,280 lots.          

On Monday night, SHFE 1408 aluminum contract climbed to RMB 13,585/mt after starting at RMB 13,560/mt. However, the most active contract retreated to RMB 13,520/mt later in the session before finishing at RMB 13,545/mt. Trading volumes totaled 20,902 lots, with positions up 304 lots to 131,086 lots. 

The most active SHFE aluminum contract is poised to move higher to RMB 13,510-13,570/mt on Tuesday due to positive Chinese and US manufacturing data. In China’s physical market, spot discounts of RMB 70-110/mt are expected over SHFE 1407 aluminum contract.