SHANGHAI, Sept. 22 (SMM) –SHFE aluminum followed other base metals down on Monday. SHFE 1512 aluminum hit a two-week low of RMB 11,900/mt after opening at RMB 12,045/mt. Finally, the most active contract ended down RMB 130/mt or 1.08% at RMB 11,920/mt. Trading volumes were up 19,174 lots to 35,218 lots, and positions were up 4,692 lots to 118,000 lots.
In east China spot aluminum market, sellers held offers firm, expecting processors to stockpile goods for upcoming holiday. Downstream buyers bought only as needed. Prices were mainly between RMB 11,880-11,900/mt in Shanghai, discounts of RMB 50-30/mt over SHFE 1510 aluminum, versus RMB 11,880-11,900/mt in Wuxi and RMB 11,870-11,880/mt in Hangzhou. In the afternoon, prices fell RMB 10/mt to RMB 11,870/mt.
SMM’s latest survey of 32 large aluminum smelters, traders and processors in China reveals the following results:
43% of them expect aluminum prices to stabilize this week: USD 1,600-1,630/mt for LME aluminum and RMB 11,900-12,000/mt for SHFE 1512 aluminum. They understand that selling pressure at highs will prevent prices from rising while pre-holiday stocking will put a floor under prices.
Another 19% are bullish: LME aluminum will rise above USD 1,630/mt, and SHFE 1512 aluminum will climb above RMB 12,000/mt. They noted that processors will build up stocks before upcoming Chinese National Day holiday (Oct. 1-7) and that smelters and large traders will hold back goods at lows, which push prices up.
The rest 38% are bearish. LME aluminum might fall below USD 1,600/mt, and SHFE 1512 aluminum contract might fall below RMB 11,900/mt. They cited a series of negative factors: 1. Bearish sentiment in strong in base metals market, with SHFE zinc hitting daily downside limit at one point. 2. Investors intend to raise bearish bets after the US Fed’s policy meeting. 3. Smelter production cuts are limited in China, and new capacity keeps coming on stream. Spot aluminum stocks in China’s five major markets were higher than a year ago at around 970,000 mt. 4. SHFE aluminum lost support at key moving averages, with its KDJ pointing downward.