SMM Morning Review - 2010/7/5 Aluminum Market

SHANGHAI, July 5 (SMM) -- LME base metals prices closed with gains last Friday (July 2nd). LME aluminum prices opened at USD 1,948/mt, with the highest level and the lowest level at USD 1,956/mt and USD 1,934.5/mt, respectively, and finally ended at USD 1,937/mt, up USD 10.5/mt compared with the previous trading day, or up 0.55%. Total trading volumes reported 63,216 lots, and total positions were 757,741 lots, down 2,157 lots. LME aluminum inventories declined by 5,150 mt to 4,416,875 mt.

Market fears that the global economic recovery is slowing depressed investor confidence persistently recently, and important indexes on the European and the US stocks markets closed with declines last Friday, as the negative economic data in Europe and the US caused sell-offs. The US factory orders in May declined by 1.4% to USD 413.25 billion, with the market forecast of a drop of 0.5%. The US non-farm employment in June declined by 125,000, higher Reuters' prediction of a decline of 110,000, and the unemployment rate was 9.5%. The unemployment in the Euro zone increased in May, with the unemployment rate remaining at 10% for three consecutive months. However, any negative impact from base metals markets was limited, since the facts that LME base metals inventories experienced declines last Friday, and the US dollar weakened partly supported base metals prices.

SHFE aluminum prices opened slightly higher today, and SHFE 1009 aluminum contract prices struggled at the crossing point of 5-day, 10-day, and 20-day moving averages, showing no clear direction, with prices expected to depend mainly on stock market movements and other base metals prices trends.     

To contact the writer on this report: ericzhang@smm.cn

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