SMM Morning Review - 2010/6/18 Aluminum Market

SHANGHAI, June 18 (SMM) -- A series of economic data released by the US government last night were weaker than expected. The growth in jobless claims in the week ended on June 12th was higher than expected; manufacturing data rose at the slowest pace over 10 months; housing starts was lower than expected. The weaker-than-expected economic data triggered risk-aversion sentiment, which in turn helped push up gold prices to a record high. However, both the US dollar and crude oil prices declined, and the weakening US dollar failed to stimulate metals prices to increase, and SHFE base metals prices slipped all the way after the Chinese Dragon Boast Festival holiday, triggering the sell-offs on LME base metals market.

LME aluminum prices reversed some previous losses before closing as Dow Jones Industrial Average closed with gains, and finally closed at USD 1,951/mt, with the lowest prices reported at USD 1,948/mt. LME aluminum prices mainly moved between USD 1,950-1,980/mt yesterday, testing the support level of the 10-day moving average. Positions declined significantly by 2,507 lots to 732,587 lots, while LME aluminum inventories continued to drop by 6,725 mt to 4,481,200 mt. SHFE aluminum will transition into a new contract month today, and SHFE 1009 aluminum contract prices have been under the pressure of 5-day moving average. Whether or not SHFE 1009 aluminum contract prices can hold steady at RMB 14,500/mt today will depend on domestic A-shares market movements. Spot aluminum prices will also move narrowly around RMB 14,300/mt.         
      
To contact the writer on this report: ericzhang@smm.cn

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