[Al] CBI Morning Review - 2009/5/20 Aluminum Market

SHANGHAI, May 20 (CBI China) -- The U.S. Department of Commerce announced on Tuesday that the annual rate of housing starts in April fell by 12.8% to 458,000, far below the market forecast of 520,000. The building permits in April fell by 3.3% to a record low of 494,000, also far below the previous forecast of 530,000, the two indicators have hit a record low. The weak U.S. housing data depressed the market sentiment. Although the U.S. dollar index fell slightly, the base metals showed a weak performance, and lose the previous gains in electronic trading.

    LME aluminum price closed at USD 1,502/mt, down USD 23/mt. The inventories increased by 12,355mt to 4.0606 million mt, hitting a record high again. Although the Chinese government announced the RMB 7 billion subsidy policy for the auto and home appliances replacements, any positive impact on the demand for aluminum will be limited in the short term. SHFE aluminum price will lose previous gains today, with three-month contract fluctuating in a narrow range below RMB 12,800/mt.

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