SHANGHAI, Apr. 7 (SMM) – SHFE 1506 aluminum contract fared better than LME aluminum. The most active contract hit RMB 13,420/mt, buoyed up by Chinese government’s relaxation of controls over the housing market. Although the contract dropped below RMB 13,400/mt later in the week, the lower-end of its moving band inched up. In China’s spot market, suppliers continued to hold back goods as strong SHFE aluminum turned them bullish. Traders were active in the market, allowing spot discounts to narrow to around RMB 100/mt.
SHFE 1506 aluminum contract is poised to rise to RMB 13,300-13,450/mt, underpinned by positive technical side and improved market sentiment. In China’s spot market, reduced supply from suppliers withholding goods will help spot discounts shrink further. However, soft downstream demand will slow the pace at which spot discounts narrow. Spot aluminum is expected to trade RMB 80-130/mt below SHFE front-month contract.
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