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Slack season worries to cap rebound in Shanghai aluminium prices
Jul 4,2019 16:30CST
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Source:SMM
Weak fundamentals in a slow season will depress upward momentum in prices in the short term

SHANGHAI, Jul 4 (SMM) – SMM does not believe the rebound in Shanghai aluminium prices on Thursday July 4 to continue as weak fundamentals in a slow season will depress upward momentum in prices in the short term. 

As a broad base metal rally improved market sentiment, the most-traded SHFE aluminium August contract rebounded from 13,620 yuan/mt, the lowest since March 11, during the night session of Wednesday July 3, and extended increase on Thursday July 4 to above the five-day moving average, ending up 0.92% at 13,775 yuan/mt. 

Slow depletion in inventories of primary aluminium reinforced worries about slowing downstream consumption in a slack season of July-August, and this may weigh on prices. 

Prices are likely to receive limited support from raw materials as an anticipated ramp-up in new, resumed alumina capacity will expand downside room in alumina prices, SMM believes. 

A contango structure across SHFE July contract to March contract for the year 2020 pointed to expectations of consumption recovery in September-October. 

Market commentary
Aluminium

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