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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. 
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