Aluminum: Traded prices of spot aluminum in Shanghai were between RMB 15,980-16,020/mt on Monday, with discounts of RMB 50-100/mt over the SHFE current-month aluminum price. In the morning, SHFE 1202 aluminum contract became the current-month contract and its price moved up slightly to RMB 16,100/mt. However, spot aluminum prices lacked upward momentum due to weak consumption in spot markets, with discounts over the SHFE current-month aluminum price expanding to RMB 100/mt. Goods movements were actively only at traders with high stocks or tight cash flow and quotations were held firm by other traders. The overall traded volume was light. The SMM aluminum price has stayed near RMB 16,000/mt during recent two months as weak downstream demand erodes rebound momentum while high production costs help it stabilize. In an SMM survey of this week's aluminum prices, 69% of market respondents are neutral as light trading will allow little chances for any breakthrough. 12% of respondents said the metal will gain this week, however, building their confidence on high expectations of a reserve requirement cut by the PBOC in the face of weak domestic and overseas demand. In contrast, remaining 19% of respondents are pessimistic mainly due to weak demand, climbing stocks and the strong US dollar caused by euro zone debt crisis, which has been weighing on commodities. |
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