SMM Aluminum Market Morning Review (2015-4-24)

SHANGHAI, Apr. 24 (SMM) –LME aluminum fell overnight as negative news flooded in. China decided to remove provisional export tax on aluminum rod and bar, igniting worries over oversupply in overseas market. HSBC’s flash China manufacturing PMI was 49.2 in April, missing expectations for 49.4. US initial jobless claims were higher than expected. US new home sales undershot forecasts. LME aluminum crashed to USD 1,769/mt after opening at USD 1,806/mt on Thursday, and ended the day at USD 1,782/mt. Trading volumes were up 10,534 lots to 18,691 lots, and positions were up 605 to 766,791.

 

On Thursday night, SHFE 1507 aluminum contract jumped to RMB 13,240/mt after starting at RMB 13,180/mt. The most active contract finished the night session at RMB 13,215/mt. Trading volumes totaled 9,774 lots, and positions were up 1,942 to 120,970.

 

SHFE 1507 aluminum contract rose on favorable export policy, but weak LME aluminum and resistance at the 20-day moving average will keep prices in check between RMB 13,190-13,250/mt on Friday. In China’s spot market, spot discounts are expected to widen to RMB 120-160/mt over SHFE 1505 aluminum contract.