SHANGHAI, Mar. 7 (SMM) –The Shanghai Futures Exchange (SHFE) recently approved 12 warehouses from eight companies for aluminum delivery.
The latest move by the SHFE will help facilitate hedging business for local aluminum smelters and processors, as well as reduce aluminum delivery costs, SMM aluminum analyst Liu Xiaolei said.
Every coin has two sides, though. Some aluminum smelters expressed concerns that production costs for deliverable aluminum will be 10-20 yuan per tonne higher than those for non-deliverable aluminum, due to high requirement on deliverable aluminum’s packaging, quality, etc. Smelters are more concerned with whether the price spread between deliverable and non-deliverable aluminum could offset additional production costs for the former.
Market players see a high possibility that the number of new SHFE aluminum delivery brands will increase this year.
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