SHANGHAI, May 12 (SMM) - Overnight, the most-traded SHFE 2306 aluminium contract opened at 18,000 yuan/mt, with the highest and lowest prices at 18,030 yuan/mt and 17,830 yuan/mt before closing at 17,940 yuan/mt, down 220 yuan/mt or 1.21%.
LME aluminium opened at $2,275.5/mt on Thursday, with its high and low at $2,282/mt and $2,202/mt respectively before closing at $2,213/mt, a drop of $56.5/mt or 2.49%.
An increasing share of molten aluminium has been made into billets and other intermediate products. If the end demand is still weaker than expected, smelters may raise their share of ingot output. As it takes time for weak consumption to be reflected in inventory, aluminium ingot inventory may remain low and continue to drop in May, thus giving some support to aluminium prices. SMM expects the short-term aluminium prices to come under pressure, but the downside room may be limited under the support of low inventory. Factors to watch: macro front and supply in Yunnan.
