SHANGHAI, May. 4 (SMM) – SHFE 1507 aluminum contract followed LME aluminum above all moving averages early last week, but the price rise slowed significantly later. Bulls began to exit after prices failed to break though RMB 13,400/mt. In China’s spot market, sellers were eager to sell, causing spot discounts to widen to RMB 200/mt. Traders lost buying interest, and downstream producers watched from the sidelines.
SHFE 1507 aluminum contract should rise to RMB 13,300-13,450/mt, driven by positive technical side and entry of bulls. In China’s spot market, oversupply and weak downstream demand will keep spot prices in check. Spot discounts of RMB 170-220/mt are expected over SHFE front-month contract.