SMM Morning Review - 2010/8/19 Aluminum Market

SHANGHAI, Aug. 19 (SMM) -- Investors took a cautious attitude last night due to uncertainties over economic outlook and a lack of important economic data, and LME base metals prices were mixed as a result.    
 
LME aluminum prices opened at USD 2,145/mt, and later moved lower gradually, with prices even dipping to USD 2,093/mt, and finally prices reversed some losses and ended at USD 2,105/mt, down USD 36/mt compared with the previous trading day, or down 1.7%. Total trading volumes were 202,459 lots, and total positions fell by over 30,000 lots to 687,855 lots. LME aluminum inventories grew significantly by 20,975 mt to 4,469,775 mt. Large amounts of goods were tied up in financial deals, resulting in tightening market supplies, and spot discounts in overseas markets against LME three-month aluminum contract prices narrowed consecutively as a result, attracting more and more attention from market players. Meanwhile, aluminum producers were under heavy selling pressure amid narrower spot discounts, causing LME aluminum prices to lead LME base metals prices declines last night.

SHFE aluminum prices opened lower today negatively affected by plummeting LME aluminum prices, with technical indicators showing an unclear market direction in the short term. However, rising costs and positive financial market sentiment will continue to support SHFE aluminum prices to fluctuate in a narrow band, and SMM predicts SHFE 1011 aluminum contract prices will move between RMB 15,450-15,650/mt today.         

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