50% Chinese Aluminum Smelters Expect Aluminum Prices to Stabilize This Week, SMM Survey

SHANGHAI, Aug. 30 (SMM) – SMM surveyed 44 Chinese aluminum smelters about their opinions over aluminum price outlook.

See SMM forecast, please click: LME Aluminum to See Range-Bound Trading Next Week, SMM Says 

About half of them expect SHFE 1610 aluminum to stabilize at RMB 12,300-12,450/mt and LME aluminum to hold steady at USD 1,635-1,655/mt. The US dollar index shot up following US Fed Chairwoman’s hawkish speech at the meeting in Jackson Hall. The US dollar index will fall back, should non-farm payrolls miss forecast. LME aluminum has found support at the 60-day moving average and resistance at the 5-day moving average. SHFE 1610 aluminum has found support at the 40-day moving average and resistance at the 5-day and 10-day moving averages.

Another 23% expect SHFE 1610 aluminum to fall to RMB 12,200/mt and LME aluminum below USD 1,635/mt. Aluminum stocks in China’s five major markets grew to 294,000 mt on Monday, up 10,000 mt from last Thursday. Growing supply will weigh down aluminum prices.  

The rest 27% expect SHFE 1610 aluminum to rise above RMB 12,450/mt and LME aluminum above USD 1,655/mt. Spot aluminum premiums in east China exceeded RMB 200/mt on Monday, which will offer upward momentum to SHFE aluminum. Producers of aluminum extrusions, automotive aluminum sheet and light gauge foil reported growing orders, which will boost aluminum demand. Positions of SHFE 1609 aluminum were 47,410 lots as of August 29, while SHFE aluminum warehouse warrants were just 7,181 mt, so a short squeeze is likely to take place.