SMM Aluminum Market Morning Review (2014-12-17)

SHANGHAI, Dec. 17 (SMM) – Despite a softer greenback, a flood of negative economic data weighed LME aluminum down overnight. Manufacturing sector in China slipped into contraction territory. Business activity in the euro zone showed tepid growth. US housing and manufacturing sectors were sluggish. LME aluminum touched close to 2-month low of USD 1,900.8/mt after opening at USD 1,927.5/mt, and ended Tuesday at USD 1,911/mt. Trading volumes were up 5,367 lots to 17,160 lots, with positions down 11,870 lots to 827,394 lots. 

 

On Tuesday night, SHFE 1502 aluminum contract slipped to RMB 13,265/mt after starting at RMB 13,315/mt, and finished the night session at RMB 13,295/mt. Trading volumes totaled 20,726 lots, with positions down 20 lots to 108,152 lots. 

 

Discouraging economic data and caution before the result of the Fed’s policy meeting should keep the most active SHFE aluminum contract in check between RMB 13,250-13,310/mt on Wednesday. In China’s spot market, falling aluminum prices will drive buyers to the sidelines, with spot discounts of RMB 0-20/mt and premiums of RMB 0-20/mt expected over SHFE 1501 aluminum contract.