SHANGHAI, Aug 17 (SMM) - In light of multiple key signals like “dual-control”, “carbon reduction”, “power restriction”, etc. released at the press conference held by NDRC in the morning, SHFE aluminium surged and intraday prices once touched 20510 yuan/mt in mid-day, the highest since April, 2008.

SMM survey showed that spot in east China was mostly quoted at 20230-20250 yuan/mt, a new record since March, 2008. In spot market, discounts expanded slightly, but cargos available in the market were insufficient. Spot transactions in Gongyi were generally made with front-month premiums of 150 yuan/mt, and absolute prices of spot stood at 20090-20130 yuan/mt.  

On the macro front, China economy faces greater downward pressure amid less-than-expected economic indexes in July. While on the fundamentals, domestic aluminium ingots are expected to maintain the mild re-stocking as previously delayed cargos will arrive in congestion after transportation was unblocked.

However, it is worth noticing that possibility of intensifying power restrictions remains. And the traditional off-season will be due in half a month, thus social inventories will be reversed to de-stocking soon. Long capitals are not eager to leave the market to take profits. As such, SHFE aluminium is likely to fluctuate at high with minor premiums of spot.

SMM believes that SHFE aluminium will hover at high levels in the short term amid strong fundamentals supported by slow recovery in social inventories in the last trading day, mild increase in arrivals, intensified power restrictions in east Inner Mongolia, etc.