[Al] SMM Morning Review - 2009/10/22 Aluminum Market

SHANGHAI, Oct. 22 (SMM) -- LME aluminum prices opened at USD 1,915/mt yesterday, and later hit the daily high of USD 1,982/mt, as the US dollar index plunged to 74.94, and closed at USD 1,970/mt finally, with a gain of 2.55%. LME aluminum inventories continued to increase by 9,050mt to 4,589,900mt.

    The US dollar index plunged, pushing up commodity market, and crude oil prices soared to USD 82/barrel, and base metal prices surged as well. LME aluminum inventories increased for two consecutive days after half a month declines, which exerted negative impact on aluminum prices. LME copper prices have broken through recent highs, but LME aluminum prices grew at a slower pace.

    Today, China will released GDP, and as the world's largest consumer of industrial metals, China's GDP will exert strong impact on base metal prices today. Meanwhile, Wen Jiabao, Premier Minister of the State Council, chaired a Standing Committee of the State Council yesterday and considered the management of inflation expectations as the focus of macro control. Although this news will have negative impact on metal markets to a certain extent, China will continue to implement a moderate loose monetary policy in the short term in order to continue to ensure stable and sound development of China's economy. This news will be neutral in the long run, but particular attention should be paid to price trends of base metals.

    SHFE aluminum prices will track the upward trend of LME aluminum prices today, but soft aluminum prices and sluggish spot market will hamper the upward movement for SHFE aluminum greatly. SHFE aluminum prices are expected to stand firm at RMB 15,000/mt and to move up to test RMB 15,200/mt.

Copyright © 2009, CBI (Shanghai) Co., Ltd. All Rights Reserved.

None of this material may be used for any commercial or public use in any form or means, without the prior written consent of CBI China. For reproduction issue, please contact us by email: metalresearch@cbichina.com or tel:86-21-51550040