[Al] CBI Morning Review - 2009/5/21 Aluminum Market

SHANGHAI, May 21 (CBI China) -- Data released by EIA on Wednesday show that as of May 15th, the US crude oil inventories fell by 2.1 million barrels to 368.5 million barrels, while the market insiders predicted it would fall by 200,000 barrels. On Wednesday, the New York oil futures soared to USD 62/barrel. The Federal Open Market Committee (FOMC) pointed out in the April meeting minutes that some decision-making officials believe the Fed should increase their purchase of long-term assets in open market to support the growth. This news dampened the US dollar again, and the US dollar index declined more rapidly.

    The favorable data of crude oil and US dollar index failed to exert positive impact on base metal prices, and the market players remained pessimistic toward the future demand, and overnight LME base metal prices were mixed. LME aluminum price closed at USD 1,495/mt, down USD 7/mt, due mainly to the significant increases in LME inventories during recent days. LME inventories have increased to 4.15 million mt. Domestic aluminum producers restarted their capacity gradually, leading to increases in the inventories and exerting greater pressure on SHFE aluminum contract price. SHFE aluminum price is expected to remain weak in the short term.

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