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SMM Aluminum Market Daily Review (2012-10-22)

posted Oct 22, 2012, 8:55 PM by Benkaico Benkai

SHANGHAI, Oct. 23 (SMM) – The SHFE 1212 aluminum contract opened lower at RMB 15,430/mt on Monday as LME aluminum prices plunged by 2% last Friday. Trading volumes were a mere 4,504 lots. The most active contract was resilient to declines compared with other base metals due to limited short selling, but met resistance at the 5-day moving average. Finally, the three-month contract shed RMB 60/mt or 0.39% to close at RMB 15,435/mt. Positions were up 144 lots to 57,470 lots. The most-traded contract fell back to levels seen early last week due to a lack of confidence and is expected to test support at RMB 15,400/mt in the short term.

Spot aluminum was mainly traded between RMB 15,280-15,310/mt in Shanghai on Monday, with discounts between RMB 60-90/mt. Low-iron aluminum was traded between RMB 15,350-15,370/mt. The most active SHFE aluminum contract proved resilient to declines compared with other base metals, but sluggish consumption in spot market dragged spot aluminum prices below RMB 15,300/mt again. Cargo holders were eager to move goods at lower prices at the month’s end, while downstream processors purchased as needed. In the afternoon, the SHFE 1212 aluminum contract slipped slightly. Wait-and-see sentiment dominated the spot market. Sparse quotations were seen at RMB 15,280-15,290/mt, but downstream producers showed little buying interest, leaving trading extremely quiet.  
   
SMM’s statistics reveal that spot aluminum traded prices averaged RMB 15,290/mt in Shanghai on Monday against RMB 15,312/mt last week. According to SMM’s latest survey of 46 aluminum ingot traders, an overwhelming 57% expect aluminum prices to stay unchanged from Monday’s traded prices this coming week and the rest 43% believe aluminum prices will fall.

LME aluminum prices plunged by 2% last Friday, but remained above last week’s low of USD 1,946/mt, while SHFE 1212 aluminum contract prices stabilized above RMB 15,400/mt after the Chinese National Day holiday, both proving resilient to declines compared with other base metals. Short selling should be very limited despite the fact that LME and SHFE aluminum prices have little chance of rebounding. Neutral traders thus expect LME aluminum prices to move between USD 1,940-2,000/mt and the most active SHFE aluminum contract to fluctuate between RMB 15,400-15,480/mt and spot aluminum prices to struggle at RMB 15,300/mt in this coming week.

LME copper retreated below USD 8,000/mt, suggesting short selling is elevated. LME aluminum inventories exceeded 5 million mt and domestic aluminum stocks in trading markets also rose above 1 million mt. Global economic slowdown and sluggish consumption exacerbated inventory pressure. The chronic European debt crisis caused risk aversion to grow. Aluminum prices will fall along with other base metals. In this coming week, bearish traders believe LME aluminum should struggle at USD 1,950/mt, the most active SHFE aluminum prices will test support at RMB 15,300/mt and spot aluminum prices are expected to hit a fresh year’s low of RMB 15,200/mt.  

SMM Daily Review – 2012/9/20 Base Metals Market

posted Sep 20, 2012, 8:30 PM by Benkaico Benkai

Aluminum 
The SHFE 1212 aluminum contract opened lower at RMB 15,790/mt on September 20. The Shanghai Composite Index plunged as weak SHBC China flash PMI for September dampened market sentiment. Longs took profits as a result, causing the most-traded contract to drop. In the afternoon, the contract for December delivery retreated below RMB 15,700/mt. Finally, the three-month contract shed RMB 105/mt or 0.66% to close at RMB 15,700/mt. Positions were down 2,968 lots to 76,334 lots. The most active contract lacked momentum necessary to rebound as slack domestic demand triggered bearish sentiment. SHFE 1212 aluminum contract is expected to meet strong resistance at RMB 15,700/mt in the near term.

Spot aluminum was mainly traded between RMB 15,500-15,520/mt in Shanghai on Thursday, with discounts between RMB 120-100/mt. Low-iron aluminum was traded between 15,570-15,580/mt. The most active aluminum contract trended down after a low opening, while support at RMB 15,600/mt was weak for the current-month contract, triggering strong bearish sentiment in spot aluminum market. Some traders were eager to move goods by lowering quotations to RMB 15,500/mt, whereas downstream producers purchased as needed. In the afternoon, the SHFE 1212 aluminum contract expanded losses, fuelling stronger bearish sentiment. As a result, quotations of spot aluminum dropped to RMB 15,470-15,480/mt, but inquiries were rarely heard among downstream producers and middlemen, leaving overall trading extremely thin.  

SMM Daily Review – 2012/9/6 Aluminum Market

posted Sep 6, 2012, 7:46 PM by Benkaico Benkai

SHANGHAI, Sept. 7 (SMM) – The SHFE 1212 aluminum contract gapped higher at RMB 15,570/mt on September 6, as LME aluminum extended gains. The most active contract found strong support at RMB 15,500/mt due to short-covering. Finally, the contract for December delivery gained RMB 145/mt or 0.94% to close at an intraday high of RMB 15,640/mt. Positions were up 82 lots to 89,762 lots. Investors’ sentiment should be affected by the results of Thursday’s ECB meeting. If positive policies are introduced, longs will enter the market and SHFE aluminum will extend gains further as a result. If otherwise, short selling is expected to take place and the three-month contract will meet stronger resistance at RMB 15,600/mt. 
  
Spot aluminum was mainly traded between RMB 15,400-15,440/mt in Shanghai on September 6, with discounts between RMB 120-70/mt. Low-iron aluminum was traded near 15,490/mt. The most active contract gapped higher and all SHFE aluminum contracts jumped above RMB 15,500/mt. Sufficient supply against sluggish consumption kept a lid on rising momentum of spot aluminum, causing spot discounts to expand above RMB 100/mt again. The price gap between deliverable and undeliverable goods widened, attracting some dip-buying. In the afternoon, the three-month contract rose, but sellers and buyers in spot markets stood on the sidelines, with sparse quotations between RMB 15,400-15,420/mt. Deals were rarely done. 

SMM Daily Review - 2012/8/6 Base Metals Market

posted Aug 6, 2012, 2:36 AM by BENKAI Co

Aluminum

The most active SHFE 1211 contract moved narrowly after a low open at RMB 15,215/mt on August 3 as LME aluminum shed USD 26/mt overnight. In the afternoon, the Shanghai Composite Index struggled to rebound, helping base metals edge up at the tail of trading. The three-month contract finally closed at RMB 15,300/mt, a mere drop of RMB 10/mt from the settlement price of the previous trading day. Trading volumes increased by 544 lots to 18,888 lots and positions dropped by 5,772 lots to 106,384 lots. Longs entered the market at low prices, helping support prices.

Mainstream traded prices for spot aluminum were at RMB 15,340-15,360/mt in Shanghai on August 3, with discounts at RMB 0-20/mt and low-iron aluminum traded at RMB 15,400-15,430/mt. SHFE aluminum prices were persistently weak, with the current-month contract dropping to near RMB 15,350/mt. Traders were actively buying at lows, but total trading volumes failed to increase significantly as supply decreased on falling prices. The current-month contract ticked up during the afternoon session, pushing spot aluminum traded prices to RMB 15,360/mt. Selling interest, however, remained generally low in spot aluminum markets.

SMM Weekly Review and Forecast (Jul. 23-27)

posted Aug 6, 2012, 2:35 AM by BENKAI Co

SHANGHAI, Jul. 30 (SMM) – Last week, the European and US manufacturing data showed continued contraction, and HSBC China PMI for July, though rallied unexpectedly, was still below the 50, indicting the shrink of manufacturing sector. Besides, borrowing costs in Spain and Italy continued climbing, and the risk of a Greek exit intensified. The escalating European debt crisis depressed market confidence, and pushed the US dollar index to hit a two-year high. Thursday night, Draghi’s promise to preserve the euro eased fears in the market, with the euro rebounding and the US dollar index falling to 82.70, trimming the losses in base metals. SMMI fell sharply by 2.29%. SMMI.Cu dropped the most by 2.83%, followed by a 2.55% decline in SMMI.Ni. Other metals also slipped by over 1%. Copper China’s government restated its commitment to curb the real estate markets, but this news drove the Shanghai Composite Index down by over 2% and to a new low for the year. Against this backdrop, SHFE copper prices slumped to RMB 53,600/mt, down from RMB 56,000/mt on July 20th, a drop of more than 3% for the week. Total trading volumes and positions increased by nearly 1 million and 85,000 lots, respectively, with selling pressures for forward SHFE copper contracts growing. SHFE copper prices stood above the 5-day moving average, but experienced strong resistance at RMB 55,500/mt.   As copper futures prices retreated, traded prices in spot copper markets fell below RMB 55,000/mt, turning investors bearish and flooding spot markets with hedged copper. The SHFE/LME copper price ratio stabilized around 7.3 and compelled imported copper cargo-holders to move goods for cash, leading to an increase in spot copper supply. A narrowing of the price gap among SHFE copper contracts, in addition to higher premiums, left few speculative opportunities for traders. Downstream producers continued to buy only as needed, so overall market transacti......

SMM Daily Review - 2012/7/5 Base Metals Market

posted Jul 6, 2012, 2:28 AM by BENKAI Co

Aluminum 
The most active SHFE aluminum contract for October delivery started slightly higher at RMB 15,645/mt and hit a high of RMB 15,790/mt as shorts continued to take profits, strengthening even when other base metals weakened. Cautious longs and pressure at RMB 15,700/mt dragged the contract back to close at RMB 15,680/mt, up RMB 65/mt or 0.42%. Positions dropped 4,894 lots to 107,958 lots. SHFE aluminum climbed for a third successive trading day, but was also stopped at the 30-day moving average. Transacted contracts dropped further below 50,000 lots. SMM expects the most active SHFE aluminum contract to test support at RMB 15,600/mt for the near term.

Spot aluminum traded at RMB 15,700-15,720/mt in Shanghai, with discounts of RMB 50-70/mt over the current-month SHFE aluminum contract. Low-iron aluminum traded at RMB 15,800-15,820/mt. SHFE aluminum opened with the closing price of the previous trading day after LME aluminum prices dropped slightly a day earlier. It rebounded during later trading, but failed to push up spot prices, with spot discounts expanding to RMB 70/mt. Trader selling interest was strong but buying weak, so deals were quite limited. Spot trading turned even lighter in the afternoon as SHFE aluminum trimmed gains, with sparse quotations seen at RMB 15,690-15,700/mt. No deal was supported in the afternoon session as buying disappeared.

SMM Daily Review – 2012/5/14 Base Metals Market

posted May 14, 2012, 8:46 PM by BENKAI Co

Aluminum
The Chinese central bank announced in the evening of May 12 to cut banks’ reserve requirement by 0.5 percentage point from May 18, a second cut this year and a signal that monetary policies will continue to loosen as necessary. However, investor worries towards implementation of austerity measures in Europe due to political uncertainty in the region overshadowed support from China. The most active SHFE aluminum contract for August delivery opened slightly higher at RMB 16,090/mt and hit a high of RMB 16,150/mt, but finally closed down RMB 80/mt or 0.5% at RMB 15,990/mt as short selling strengthened. Positions added 2,554 lots to 102,524 lots. Losses were seen in both stocks and futures markets. Though SHFE aluminum shed less losses compared with other base metals, contracts for near month delivery slipped immediately below RMB 16,000/mt, triggering a strong bearish market sentiment. The macro economy should stay on the negative side, indicating stronger pressure at RMB 16,000/mt for the most actively traded contract.

Spot aluminum traded at RMB 16,000-16,030/mt in Shanghai, at premiums of RMB 20-50/mt over the current-month SHFE aluminum contract. Traded prices of spot aluminum were RMB 16,010-16,030/mt in Wuxi and RMB 15,990-16,020/mt in Hangzhou. Premiums expanded to RMB 50/mt as goods holders held quotations at RMB 16,000/mt. Buying was quite weak, however, leading to extremely light trading.

SMM’s recent survey on this week’s aluminum prices covered 42 traders. 20 are neutral and 22 pessimistic.

There are no optimistic traders in this week’s survey, highlighting worries of domestic traders. The number of pessimistic traders increased from 7 to 22, accounting for 52% of all respondents. These traders said spot aluminum saw discounts changing into premiums, showing stability in aluminum spot. It has also received support from large aluminum businesses and traders. However, as news from overseas markets is still negative, the European debt crisis is still unclear and Greece’s euro zone exit triggered speculation. The US dollar index also hit a new high, weighing on LME aluminum prices, which may slip to USD 2,016/mt, a new low this year. In the domestic market, though the reserve requirement cut confirms loosening monetary policies, downstream demand stays weak. The current-month contract dropped for 8 successive trading days as a result of development in overseas markets. Spot demand in the peak-demand season is still weak, weighing on aluminum prices. These traders expect aluminum prices to drop below RMB 16,000/mt in the near term.

Remaining 20 traders expect aluminum prices to stabilize this week. These traders acknowledge aluminum prices are pressured in the near term, but also expect stability given support at the bottom, higher bauxite duties in Indonesia, possible supply cut by large aluminum businesses when prices fall, weaker impact from Europe as some risk aversion demand has already been met, a reserve requirement cut by Chinese central bank and resumption of real estate and rail transportation projects. They expect aluminum prices to stay at RMB 16,000-16,100/mt this week.

SMM Daily Review - 2012/5/4 Base Metals Market

posted May 6, 2012, 9:15 PM by BENKAI Co

Aluminum
The most active SHFE aluminum contract for August delivery opened lower at RMB 16,305/mt and closed down RMB 30/mt or 0.18% at RMB 16,335/mt on Friday, with transacted contracts dropping by half. The contract consolidated at the RMB 16,300/mt mark, however, showing more stability than other base metals.

Spot aluminum traded between RMB 16,150-16,180/mt in Shanghai, at discounts of RMB 0-30/mt over the current-month SHFE aluminum contract. Stock replenishment did not show up ahead of the weekend due to weak demand. Goods holders held quotations at RMB 16,150/mt and deals were done mostly at the low end.

SMM Daily Review - 2012/4/17 Aluminum Market

posted Apr 18, 2012, 2:10 AM by BENKAI Co

Apr 18, 2012 08:56 Source: SMM

SHANGHAI, Apr. 18 (SMM) – The most active SHFE aluminum contract for delivery in July opened at RMB 16,075/mt and closed down RMB 20/mt or 0.12% at RMB 16,050/mt on Tuesday, after being dragged back from RMB 16,100/mt by short selling. Positions gained 2,164 lots to 63,472 lots while transactions contracted noticeably to 8,000 lots. Though the bearish market sentiment has been preventing a rebound, the downward space is limited by production costs.

Spot aluminum traded between RMB 15,950-15,980/mt in Shanghai, at discounts of RMB 20/mt to premiums of RMB 10/mt over the current-month SHFE aluminum contract. Traders were open to deals at slight discounts after the current-month contract recovered a little bit on the heel of gapping lower due to a shift in delivery month. Downstream and middlemen only bought cheaper goods and became unwilling to spend money after spot prices climbed to near RMB 16,000/mt.

SMM Daily Review - 2012/3/29 Base Metals Market

posted Mar 29, 2012, 11:18 PM by BENKAI Co

Aluminum
As Asian equity markets continued to shed losses, still led by the Shanghai Composite Index, the most active SHFE aluminum contract for June delivery closed down RMB 45/mt or 0.28% at RMB 16,170/mt on Thursday. Transacted contracts dropped 3,074 lots to 9,632 lots as investors move to the sidelines with flat Chinese and US economic data, weak domestic demand and the coming Qingming Festival.

Spot aluminum traded between RMB 15,970-16,000/mt in Shanghai, at discounts of RMB 0-40/mt over the SHFE current-month aluminum price. The current-month contract stayed near RMB 16,000/mt despite heading down of other contracts. Some SHFE-approved aluminum ingots were traded at the current-month futures price as their holders stick to the RMB 16,000/mt mark. Trading stayed quite light, though, ahead of the Qingming Festival.

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