SHANGHAI, May 8 (SMM) –SHFE aluminum will perform better than LME aluminum this week, SMM Expects.
LME aluminum will consolidate between $ 1,900-1,950/tonne. Rumor is circulating that Shandong has released capacity cut document, which will boost SHFE aluminum. SHFE 1706 aluminum should climb to 13,800-14,250 yuan/tonne. The most active SHFE aluminum contract is expected to turn from 1706 into 1707 contract.
In domestic spot market, while consumption is turning weak, smelters and suppliers are bullish over future prices. Given nearing delivery of SHFE 1705 aluminum and 70 yuan/tonne price spread between SHFE 1705 and 1706 aluminum, spot discounts should narrow further to 0-50 yuan/tonne.
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