[Al] SMM Morning Review - 2009/7/30 Aluminum Market

SHANGHAI, July 30 (SMM) -- Negatively affected by falling motor vehicles and aircraft orders, the US durable goods orders in June fell by 2.5% unexpectedly, recording the largest decline over five months, and the market predicted it would fall by 0.6%; the Beige Book released by the Federal Reserve on Wednesday showed that the labor market and real estate market were still weak, and forms of credit were still tense, which depressed market expectations with regard to current economic recovery and dampened market confidence. In this context, a large number of speculative funds found their way to US dollar to minimize market risks, which helped push up US dollar index to 80. Meanwhile, prices of all types of bulk commodities declined, with a decline of nearly 6% for crude oil prices, and base metal prices also lost previous gains.

    Overnight LME aluminum inventories continued to decrease by 3,225mt to 4,547,025mt, but LME aluminum three-month contract prices fell below USD 1,800/mt, and closed at USD 1,794.5/mt, down USD 30/mt. Today, SHFE aluminum prices are expected to track yesterday’s downward trend. Besides, market supply was not as sufficient as market expected based on current spot inventories and transactions in spot market, so aluminum prices will find solid support at RMB 14,000/mt, and aluminum price range has been rising constantly in the long run.

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