SMM Aluminum Market Morning Review (2015-11-11)

SHANGHAI, Nov. 11 (SMM) –LME aluminum opened at USD 1,504/mt on Tuesday. LME aluminum tumbled to USD 1,482/m at one point after SHFE aluminum fell sharply. But LME aluminum then recovered some losses after SHFE aluminum rebounded, and finally ended at USD 1,508/mt. Trading volumes were up 6,493 lots to 19,610 lots, and positions were down 7,024 to 817,000. LME aluminum inventories fell to less than 3 million mt, a new low for the year. Most market players understand that LME aluminum inventories have flowed into non-LME warehouses instead of into trading market.   

On Tuesday night, SHFE 1601 aluminum sank to RMB 10,030/mt after opening at RMB 10,245/mt. But the most active contract then rallied to RMB 10,200/mt as shorts exited once prices approached RMB 10,000/mt. Finally, it ended at RMB 10,190/mt. There is little room for further declines after continuous falls, and the most active contract should range RMB 10,100-10,200/mt on Wednesday. In China’s spot market, spot discounts are expected at RMB 120-80/mt over SHFE 1511 aluminum contract.