Macro Headwinds And Bearish Fundamentals To Put Downward Pressure SHFE Aluminium Prices

SHANGHAI, May 15 (SMM) - The US debt crisis escalated, while Chinese macro data fell short of expectations. While aluminium ingot social inventories in China kept falling, the demand outlook is pessimistic. It is expected that the domestic operating aluminium capacity will exceed 40.9 million mt by the end of May. In terms of cost, the average price of SMM prebaked anodes plunged 868 yuan/mt month-on-month in May, and the power cost of smelters with captive power plants also declined. On the whole, downstream operating rates will hardly improve in the short term with the gradual arrival of the off-season.

SMM expects the short-term aluminium prices to face downside risks. The most-traded SHFE aluminium contract and LME aluminium are likely to move between 17,500-18,600 yuan/mt and $2,180-2,380/mt respectively this week.