SHANGHAI, Aug. 15 (SMM) – SMM surveyed 44 Chinese aluminum smelters about their opinions over aluminum price outlook.

See SMM forecast, please click: LME Aluminum to Consolidate at Highs Next Week, SMM Expects

About 64% of them expect SHFE 1610 aluminum to stabilize between RMB 12,200-12,350/mt and LME aluminum between USD 1,630-1,655/mt. Aluminum stocks in domestic five major markets continued growing on Monday, up another 7,000 mt from last Thursday. China’s investment, consumption and industrial value-added data all weakened, and financial data for July also pointed to declines. These will prevent aluminum prices from rising. SHFE 1610 aluminum has met resistance at the 5-day moving average, but found support at the 60-day moving average. 

Another 22% expect SHFE 1610 aluminum to fall below RMB 12,200/mt and LME aluminum below USD 1,630/mt, citing weakening downstream demand and growing supply. Orders at domestic aluminum processors dropped in August from July. Aluminum smelters are cutting ratio of aluminum liquid output against falling demand for aluminum billet, which will increase aluminum ingot output. When combined with release from new and restarted capacity, aluminum supply will grow. The rest 14% are bullish that SHFE 1610 aluminum will rise above RMB 12,350/mt and LME aluminum will rise above USD 1,655/mt. Poor US economic data will weaken expectations for US rate hike, thus putting downward pressure on the US dollar. While Germany’s CPI kept rising in recent three months, the figure is still far from the ECB’s 2% target. Market expects the ECB to loosen monetary policy. Positions of SHFE 1609 aluminum were high at 94,976 lots, meaning a potential short squeeze is expected to happen.