[Al] SMM Morning Review - 2009/8/7 Aluminum Market

SHANGHAI, Aug. 7 (SMM) -- German Economics Ministry announced on Thursday that the factory orders in June hit a new high over 2 years, signaling the largest economy in Europe is emerging from recession. The Bank of England announced on Thursday that they would invest (USD 84 billion) GBP 50 billion more to purchase bonds, making the total amount of GBP 175 billion, since the UK economy experienced relatively deeper recessions. In the mean time, the Central Bank's Monetary Policy Committee decided to maintain the benchmark interest rate at low level of 0.5% and continued to maintain cash liquidity in order to stimulate economic recovery. The Bank of England increased asset purchases, weighing on pounds and supporting US dollar to go stronger.

    LME base metal prices fluctuated due to investors’ profit-takings before the non-farm employment data is released on Friday. LME aluminum prices closed at USD 1,985/mt, down USD 70/mt, and aluminum inventories increased by 1,750mt to 4,569,600mt. As to domestic market, both long and short positions increased their positions significantly, and reported intense struggles above RMB 15,000/mt. SHFE aluminum prices will fluctuate above RMB 15,000/mt in the short term, with large possibility of moving upward in the future given current sufficient speculative funds.

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