SMM Aluminum Market Morning Review (2015-5-6)

SHANGHAI, May 6 (SMM) – A softer greenback and rising crude oil allowed LME aluminum to rise overnight. The US dollar index fell below 95 due to mixed US economic data. ISM’s US non-manufacturing PMI beat forecasts, in contrast with worse-than-expected US trade data, Markit’s US service PMI and IBD/TIPP Economic Optimism Index. Crude oil hit 5-month high as protesters shut down the eastern Libyan oil port. LME aluminum hit nearly 6-month high of USD 1,976.5/mt after opening at 1,910/mt on Tuesday. Finally, LME aluminum ended at USD 1,969/mt. Trading volumes were up 14,733 lots to 27,567 lots, and positions were up 2,900 to 788,284.

 

On Tuesday night, SHFE 1507 aluminum contract rose to RMB 13,620/mt after starting at RMB 13,420/mt. The contract finished the night session at RMB 13,585/mt. Trading volumes totaled 66,436 lots, and positions were up 14,564 to 159,490.

 

There will be little room for SHFE 1507 aluminum contract to rise on Wednesday, with prices expected between RMB 13,500-13,600/mt. In China’s spot market, sluggish downstream consumption will cause spot discounts to widen to RMB 170-210/mt over SHFE 1505 aluminum contract.