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SMM Daily Review - 2012/2/6 Aluminum Market

posted Feb 6, 2012, 10:21 PM by BENKAI Co

SHANGHAI, Feb. 7 (SMM) – The most active SHFE aluminum contract for delivery in April opened slightly higher at RMB 16,255/mt and closed RMB 10/mt or 0.06% higher at RMB 16,215/mt following struggle at the 5-day moving average on Monday. Total transactions increased 1,588 lots to 11,262 lots while total positions dropped 160 lots to 57,034 lots. Lacing direction from the news side, the contract met stronger impact from weak fundamentals. SMM expects the contract to stay near the present level while pressure builds at the RMB 16,200/mt mark.

Spot aluminum was traded between RMB 15,920-15,950/mt in Shanghai, with discounts of RMB 50-80/mt over the SHFE current-month aluminum price. Low-iron aluminum was traded between RMB 16,000-16,020/mt. The SHFE current-month aluminum price stayed near RMB 16,000/mt and downstream businesses were still in holiday pattern. Despite of sufficient supply, spot discounts did not expand. Goods holders were waiting for a recovery in demand after the Lantern Festival. Trading was light.

The averaged traded price of aluminum was RMB 15,968/mt last week. In a recent SMM survey on 41 aluminum traders, 8 expect aluminum price to climb this week, citing expectations of higher prices of other base metals and accelerated recovery of demand following the Lantern Festival. 31 said aluminum price will be little changed this week based on a balance on the news side which was supported by stable futures prices. Only 2 traders expect aluminum price will drop this week, which they see as the result of climbing stocks and staying weak demand following Chinese New Year.

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