SMM Aluminum Market Morning Review (2015-10-8)

SHANGHAI, Oct. 8 (SMM) –LME aluminum shot up to USD 1,592/mt after opening at USD 1,559/mt on October 7. The light metal fell back later in the day, but then rallied to USD 1,577/mt. 

In overseas market, the euro zone’s final manufacturing PMI was 52.0 in September. ISM’s US manufacturing PMI was 50.2 in September, slightly below 50.6 expected. The US non-farm sector created just 142,000 jobs in September, shy of 201,000 expected. US jobless rate was 5.1% in September, unchanged from August. Depressed data eased expectations for rate hike later this year. The US dollar index fell from 96.2 on September 30 to 95.4 on October 7 as a result. Global stock market rose during the week-long holiday in China. Dow Jones industrial index rose to 16,766 on October 7 from 16,285 on September 30.     

In China’s domestic market, China’s official manufacturing PMI was finalized at 49.8 in September, beating 49.7 expected. Caixin’s final China manufacturing PMI was 47.2 in September, topping forecast for 47. The Chinese government continued to stimulate consumption by reducing down payment ratio for first-time home buyers to 25% and halving car purchasing tax for cars with small emissions. China’s foreign reserves fell for a fifth straight month in September, but at a slower pace.   

Market players in China will digest economic data released during the week-long holiday.   SHFE 1512 aluminum should range RMB 11,630-11,710/mt on Thursday. Growing arrivals after the holiday and slow consumption recovery will widen spot discounts to RMB 0-40/mt over SHFE 1510 aluminum contract.