SMM Aluminum Weekly Price Review and Forecast (Apr. 20-24, 2015)

SHANGHAI, Apr. 21 (SMM) – The decline in China’s exports of unwrought aluminum and aluminum semis dampened sentiment, sending SHFE 1506 aluminum contract down. Some bears withdrew after prices fell to RMB 13,000/mt. This, together with technical correction and rising LME aluminum, helped the most active SHFE aluminum contract bounce back to RMB 13,200/mt later in the week. In China’s spot market, spot prices followed SHFE aluminum down below RMB 13,000/mt. Processors and traders, in anticipation of no price rally, showed little interest.    

 

The KDJ indicator is positive for SHFE 1506 aluminum contract, but poor market fundamentals and worries over selloffs by Chalco will deter some bulls from entering. The most active SHFE aluminum contract is expected to move between RMB 13,150-13,300/mt. In China’s spot market, cargo holders will remain eager to sell, but most will not lower quotes. Downstream producers will show little interest even at low prices. Spot aluminum should trade at discounts of RMB 70-110/mt over SHFE front-month contract.