SMM Aluminum Market Morning Review (2015-10-30)

SHANGHAI, Oct. 30 (SMM) –LME aluminum rose from USD 1,462.5/mt to USD 1,486.5/mt on Thursday as the US dollar index pulled back from highs following poor US economic data. But LME aluminum then moved down, due to strong resistance at the 5-day moving average, poor performance in other base metals, and falling SHFE aluminum. Finally, LME aluminum ended down USD 12.5/mt at USD 1,470.5/mt. Trading volumes were down 1,916 lots to 13,025 lots, and positions were up 5,964 to 803,000.   

On Thursday night, SHFE 1601 aluminum moved below the 5-day moving average after opening at RMB 10,310/mt. The contract rose to RMB 10,365/mt, but then fell back as shorts entered. Positions of SHFE aluminum index increased 4,650 to 615,000. The most active contract should fall further to RMB 10,250-10,350/mt on Friday. In China’s spot market, sellers become more willing to sell after spot discounts shrank. Downstream buyers will hold to the sidelines. Spot discounts of RMB 120-80/mt are expected over SHFE 1511 aluminum contract.