SMM Morning Review - 2010/8/18 Aluminum Market

SHANGHAI, Aug. 18 (SMM) -- The US economic data in July was positive, helping ease recent market concerns. The US industrial production in July was better than expected, and housing starts in July also rose by 1.7%, while July PPI grew by 0.2% on a monthly basis, which is in line with market prediction. Meanwhile, Wal-Mart Stores Inc., the world's largest retailer, reported a 3.6% gain in second-quarter profit, boosting market confidence, and the European and the US stock markets experienced significant gains as a result. The weakening US dollar and improving copper demand both helped drive base metals prices significantly higher.   
 
LME aluminum prices opened at USD 2,130/mt, and later moved higher gradually to USD 2,168/mt, with prices finally ending at USD 2,141/mt, up USD 23/mt compared with the previous trading day, or up 1.09%. Total trading volumes were 324,098 lots, and total positions fell by over 1,000 lots to 718,075 lots. LME aluminum inventories grew significantly by over 70,000 mt to 4,448,800 mt.

SHFE aluminum prices opened slightly higher today, with prices already climbing to near the 10-day moving average. Spot market suppliers kept offers firm due to their optimism toward market outlook, which will help support aluminum prices to some extent. SMM predicts SHFE 1011 aluminum contract prices will move between RMB 15,500-15,700/mt today.       

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