SHANGHAI, Feb. 2 (SMM) – SHFE 1504 aluminum contract became the most active one on January 26. The contract fell back immediately after breaking through the 20-day moving average, but the downside space was limited. Its trading range narrowed further to RMB 12,760-12,960/mt. In China’s spot market, sellers showed strong interest in selling at highs. Downstream consumption remained sluggish. Traders entered the market only when prices showed signs of rising. Spot discounts widened over SHFE 1502 aluminum contract.

 

This coming week, SHFE 1504 aluminum contract is expected to fall to RMB 12,740-12,860/mt on weak Chinese economy and negative technical side. In China’s spot market, some processors may build up stocks for the Chinese New Year holiday, but a growing number of processors will begin to shut down for the holiday. This should widen spot discounts to RMB 40-90/mt over the SHFE 1502 aluminum contract.