16 DECEMBER 2015Shanghai Metal Market
43% of Chinese smelters bullish toward aluminium prices this week, SMM Survey
Edited by : AL CIRCLE
1 min read
43% of the 42 Chinese aluminium smelters surveyed by SMM are bullish toward this week’s aluminium prices.
Another 33% expect prices to stabilize, while the rest 24% paint a gloomy picture.
The optimists expect LME aluminium to rise above USD 1,500/mt and SHFE 1602 aluminium to climb above RMB 10,800/mt. Aluminium production cuts in China are yielding result, as reflected in decline of aluminium stocks in China’s five major trading markets to around 810,000 mt. Tight supply in spot market will trigger a short squeeze. Most smelters will not open short positions for hedging purpose at current price level, as they expect prices to rise further.
Those neutralists see SHFE 1602 aluminium meeting resistance at the 60-day moving average, arguing that longs will be cautious about entering. On the other hand, production cuts in China will put a floor under prices.
The rest fear that LME aluminium will fall below USD 1,470/mt and SHFE 1602 aluminium will drop below RMB 10,500/mt, citing poor demand outlook and eagerness to sell against tight cash at year’s end. Moreover, falling alumina prices have helped narrow the share of loss-making aluminium capacity, weakening cost support for aluminium prices.
Another 33% expect prices to stabilize, while the rest 24% paint a gloomy picture.
The optimists expect LME aluminium to rise above USD 1,500/mt and SHFE 1602 aluminium to climb above RMB 10,800/mt. Aluminium production cuts in China are yielding result, as reflected in decline of aluminium stocks in China’s five major trading markets to around 810,000 mt. Tight supply in spot market will trigger a short squeeze. Most smelters will not open short positions for hedging purpose at current price level, as they expect prices to rise further.
Those neutralists see SHFE 1602 aluminium meeting resistance at the 60-day moving average, arguing that longs will be cautious about entering. On the other hand, production cuts in China will put a floor under prices.
The rest fear that LME aluminium will fall below USD 1,470/mt and SHFE 1602 aluminium will drop below RMB 10,500/mt, citing poor demand outlook and eagerness to sell against tight cash at year’s end. Moreover, falling alumina prices have helped narrow the share of loss-making aluminium capacity, weakening cost support for aluminium prices.
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