SMM Morning Review - 2010/12/14 Aluminum Market

SHANGHAI, Dec. 14 (SMM) -- China released economic data for November on December 11th, and the consumer price index (CPI) rose by 5.1% YoY, and the retail sales of consumer goods grew by 18.7% YoY, and the industrial value-added output increased by 13.3% YoY. Market anticipation of higher Chinese demand improved, and China did not raise interest rate to combat inflation. In response, LME base metals prices received strong buying support, and the US dollar index weakened to 79.101 and finally ended at 79.326.

The weaker US dollar sent LME aluminum prices to a high of USD 2,340/mt, and LME aluminum prices lost some gains at the tail of trading and finally closed at USD 2,330/mt, up USD 22/mt compared with the previous trading day. Transactions improved significantly, and total trading volumes were near 300,000 lots. LME aluminum inventories fell further by 1,650 mt to 4,272,375 mt.

SHFE aluminum prices opened slightly higher at above the 60-day moving average this morning, but were still weaker than other base metals prices. SMM predicts SHFE 1103 aluminum contract prices will move between RMB 16,450-16,650/mt today.               

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