SHFE Aluminum to Continue Outperforming LME Aluminum on Massive Output Cut Plan

SHANGHAI, Dec. 12 (SMM) –SHFE aluminum will continue faring better than LME aluminum next week on huge scale output cut plans in China, SMM expects.

The announcement by 14 major Chinese aluminum smelters that aluminum capacity cuts in China will expand to 4.91 million-tpy in 2015 cheered market up. This will push SHFE aluminum up to 11,000 yuan per tonne. 

LME aluminum will find support from SHFE aluminum while facing selling pressure at highs from a firm dollar. LME aluminum should test resistance at $1,530/mt next week. 

See SMM survey, please click:43% of Chinese Aluminum Smelters Bullish toward Aluminum Prices This Week, SMM Survey

In China’s spot market, supply will tighten further as no large arrivals are expected for the near future. Spot discounts should narrow to less than 100 yuan per tonne over SHFE front-month contract since delivery date is nearing. 

For news cooperation, please contact us by email: sallyzhang@smm.cn or service.en@smm.cn.