SHANGHAI, Aug. 26 (SMM) – Prices for aluminum and other base metals drifted higher overnight after the People’s Bank of China (PBOC) unexpectedly cut interest rate and reserve requirement ratio (RRR) on Tuesday. Will the rise be sustainable?
The rally in SHFE aluminum will be fleeting, Shanghai Metals Market understands.
Three major US stock markets dived before the closing bell rang overnight after opening higher. Meanwhile, China’s A-share market also moved lower after a high opening today. These suggest that market sentiment remains fragile, which will act as a drag on base metals, including aluminum.
Besides, poor market fundamentals will be a great concern. Production cuts by Chinese aluminum smelters are far from enough to reverse supply glut, given massive commissioning of new capacity.
SHFE 1510 aluminum, the most active one, dipped to 11,860 yuan per tonne after starting higher at 11,945 yuan per tonne on Wednesday.
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