45% Chinese aluminium smelters see aluminium prices advance this week

SMM surveyed 44 Chinese aluminium smelters about their opinions over aluminium price outlook. About 45 per cent of them expect SHFE 1608 aluminium to rise above RMB 12,100/mt and LME aluminium break through USD 1,620/mt. First, aluminium stocks in China’s five major markets fell 25,000 mt to 381,000 mt as of Monday. Second, limited supply of aluminium ingots with invoice dated June will allow suppliers to hold offers firm.

Another 37 per cent expect SHFE 1608 aluminium to stabilize at RMB 11,900-12,100/mt and LME aluminium hold stable at USD 1,590-1,620/mt. First, latest poll results show the number of British people in favor of staying in the EU is almost equal to those who are against. Commodity will face selloffs and the US dollar will gain favor if the UK leaves the EU. The US dollar will soften if the UK remains in the EU. Second, SHFE aluminium will face selling pressure from smelters for hedging purpose and speculators at around RMB 12,000/mt mark.

The 18 per cent are bearish that SHFE 1608 aluminium will fall below RMB 11,900/mt and LME aluminium will drop below USD 1,590/mt. First, the off-season has arrived earlier than in years past. Many aluminium processors said orders fell sharply in June. Second, output release from new and restarted aluminium capacity will add to supply pressure.