SHANGHAI, Oct. 14 (SMM) – Last Friday night, SHFE 1412 aluminum contract started at RMB 13,705/mt. The most active contract dipped to RMB 13,675/mt, but then rebounded to finish the night session at RMB 13,770/mt. Trading volumes totaled 34,034 lots, with positions down 736 lots to 140,304 lots.
On Monday, the most active contract jumped to RMB 13,855/mt shortly after the release of unexpectedly positive China trade data for September, but then surrendered gains and closed at RMB 13,820/mt. Trading volumes totaled 48,570 lots, with positions down 10,844 lots to 129,460 lots.
Spot aluminum largely traded at RMB 13,770-13,780/mt in Shanghai on Monday, discounts of RMB 0-10/mt over SHFE 1410 aluminum contract, versus RMB 13,770-13,780/mt in Wuxi and RMB 13,780-13,790/mt in Hangzhou. Spot aluminum prices inched down due to growing inventories, but this did not stoke much buying interest. In the afternoon, offers were little changed, with trading muted.
30 Chinese aluminum smelters and traders surveyed by SMM are split over aluminum price movements this week.
53% of those surveyed hold bearish views: (i) a firm US dollar and a lack of technical support may send LME aluminum down to USD 1,880-1,920/mt; (ii) the most active SHFE aluminum contract remains under downward pressure from technical side and poor market fundamentals, with prices expected between 13,550-13,700/mt; (iii) in domestic spot market, demand is unlikely to pick up anytime soon, which will bring spot aluminum prices down below RMB 13,720/mt.
The remaining 47% see aluminum prices to hold stable: (i) LME aluminum looks set to move in a tight range of USD 1,910-1,950/mt; (ii) the most active SHFE aluminum contract will draw support from upbeat Chinese trade data, and fluctuate between RMB 13,700-13,850/mt; (iii) spot aluminum prices in domestic market are poised to stop falling and stabilize between RMB 13,720-13,790/mt.