SHANGHAI, Dec. 5 (SMM) – LME aluminum dropped to USD 1,969/mt after opening Thursday at USD 1,975/mt, due to disappointing policy decision made by the ECB. The ECB decided to keep interest rate unchanged and ECB President said no new stimulus will be introduced. But market sentiment improved later as it was rumored that the ECB may unleash accommodative policy in January next year and as US initial jobless claims dropped sharply. Hence, LME aluminum rallied to USD 1,997.8/mt before ending at USD 1,996.3/mt. Trading volumes were down 10,204 lots to 10,626 lots, with positions down 417 lots to 934,837 lots. 

 

On Thursday night, SHFE 1502 aluminum contract jumped to RMB 13,540/mt, buoyed by strong performance in Chinese A-share and ferrous metals markets. The most active contract finished the night session at RMB 13,515/mt. Trading volumes totaled 35,044 lots, with positions down 140 lots to 129,612 lots. 

 

Any upside potential for the most active SHFE aluminum contract should be limited on Friday, with prices expected between RMB 13,480-13,550/mt. In China’s spot market, demand will likely pick up before the weekend, with spot premiums of RMB 0-40/mt expected over SHFE 1412 aluminum contract.