SMM Morning Review - 2010/1/6 Aluminum Market

SHANGHAI, Jan. 6 (SMM) -- Yesterday, LME aluminum prices opened at USD 2,272/mt, with highest and lowest level at USD 2,305/mt and USD 2,267.5/mt, respectively, and finally prices ended at USD 2,300/mt.  Total trading volumes reported 10,480 lots, and positions were 683,711 lots. LME aluminum inventories declined by 300 mt to 4,624,125 mt.

The US Department of Commerce announced on Tuesday that the November factory orders rose by 1.1%, higher than the estimate of 0.5%; the housing data released by the National Association of Realtors (NAR) was lower than expected, and the November pending home sales index fell by 16% to 96, much lower than the estimate of 2.0%. The mixed economic data caused the US stocks to fluctuate, but base metals prices remained strong, and the strong long sentiment will continue in the near future supported by expectations of economic recovery and higher investor interest in resource products.

LME aluminum prices broke through the resistance level of USD 2,300/mt positively affected by snowfall and supply tightness of electric power in China. SMM predicts SHFE aluminum prices will track LME aluminum prices today, and SHFE 1004 aluminum contract will move higher to test a new high, with prices expected to move in the RMB 17,300-17,550/mt range.

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