SHANGHAI, May 2 (SMM) – SHFE 1706 aluminum opened at RMB 14,060/mt on Monday and climbed to RMB 14,155/mt on entry of longs. But, prices fell back to the 40-day and 60-day moving averages later and hit a low of RMB 13,830/mt on short selling in the afternoon. SHFE 1706 aluminum closed at RMB 13,855/mt, with trading volumes down to 251,818 lots, and positions down 22,332 lots to 258,798 lots. Positions of SHFE 1707 aluminum increased 10,782 lots to 186,036 lots. The core target of capacity cuts lies in strict control over new capacity, with small impact on operational capacity for now. Capacity cuts are unlikely to reverse market oversupply in the short term. Consumption has turned weak. Aluminum prices will be subject to market fundamentals. SHFE 1706 aluminum closed down for four trading days in a row and has fallen below many moving averages. SHFE 1706 aluminum should look for support at RMB 13,700/mt. Market needs to closely watch for possible news on the policy side.
