[Al] SMM Morning Review - 2009/8/3 Aluminum Market

SHANGHAI, Aug. 3 (SMM) -- The U.S. Department of Commerce announced last Friday that the annual rate of gross domestic product (GDP) in the US during 2Q contracted by 1.0% on a quarterly basis, with the former value of 6.4% shrinkage, and the estimated value of 1.5% shrinkage. The Purchasing Managers Index (PMI) in Chicago during July has increased to 43.4 from June level of 39.9, hitting the highest level since September 2008, better than market expected, indicating the economic recession is expected to end before the end of 2009. The US economic contraction has been lower than expected, triggering the investors’ optimism and weakening the risk aversion of US dollar, so the US dollar fell drastically.

    Last Friday, LME base metal prices rose strongly due to positive US economic data and weakened US dollar. LME aluminum prices closed at USD 1,895/mt, up USD 15/mt. LME aluminum inventories increased by 17,350mt, bringing total inventories to 4,560,650mt. SHFE aluminum prices will continue to move upward to the support level of RMB 15,000/mt given the positive economic data from China and other economies.

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