SHANGHAI, May 22 (SMM) – HSBC’s flash China manufacturing PMI for May beat April’s reading, but missed forecasts and remained below 50 at 49.1. The US dollar index snapped three-day winning streak, due to a string of disappointing US economic data, including initial jobless claims, Markit’s manufacturing PMI, Philadelphia Fed’s manufacturing index and existing home sales. Crude oil and gold prices rose. However, poor market fundamentals and negative technical side prevented LME aluminum from rising above USD 1,800/mt. LME aluminum fell to USD 1,772/mt after climbing to USD 1,799/mt, and ended Thursday at USD 1,775.5/mt. Trading volumes were down 2,859 lots to 13,578 lots, and positions were down 4,273 to 780,619.
On Thursday night, SHFE 1507 aluminum contract rose to RMB 13,270/mt after starting at RMB 13,225/mt, and ended the night session at RMB 13,255/mt. Trading volumes totaled 6,090 lots, and positions were down 424 to 112,774.
The snapback of SHFE 1507 aluminum contract will boost market sentiment and lure some bulls to enter. The most active contract should range RMB 13,230-13,270/mt on Friday. In China’s spot market, trading will pick up ahead of the weekend, with spot discounts of RMB 130-170/mt expected over SHFE 1506 aluminum contract.