[Al Price] SMM Aluminum Market Morning Review (2015-8-4)

SHANGHAI, Aug. 4 (SMM) –Caixin’s final China manufacturing PMI for July hit two-year low, evidence of tepid Chinese economic growth. This caused LME aluminum to fall to USD 1,601.5/mt. LME aluminum ended Monday down USD 9/mt at USD 1,611/mt. Trading volumes were up 901 lots to 14,025 lots, and positions were up 3,904 to 883,000. 

On Monday night, SHFE 1510 aluminum contract rose to RMB 12,145/mt after opening at RMB 12,080/mt, and finished the night session at RMB 12,110/mt. Trading volumes were down 33,568 lots to 12,160 lots, and positions were up 794 to 149,000.

Slowing Chinese economy and poor market fundamentals should keep LME aluminum in check around USD 1,600/mt on Tuesday. Production cuts in China cannot offset growing new capacity and falling consumption, so SHFE 1510 aluminum contract might fall to RMB 11,950-12,150/mt on Tuesay. In China’s spot market, spot prices might fall below RMB 12,000/mt and spot discounts of RMB 50-70/mt are expected over SHFE 1508 aluminum contract.