LME aluminum should move between USD 2,015-2,065/mt on 11th Sep: SMM Morning Review

China’s imports were down as much as 2.6% YoY in August and above-scale industrial added value dropped 0.3 percentage points, highlighting aggravated downward risks of the Chinese economy and raising expectations for policy easing by the People’s Bank of China. Downbeat US nonfarm payrolls in August also pushed hopes for QE3 by the Fed in its interest rate meeting this Wednesday. The rebound of the US dollar index was curbed as a result, helping commodities to extend gains. LME aluminum trended up after a high open overnight and touched a high of USD 2,065/mt, the highest since May 21, pointing to gains for seven consecutive trading days. Positions increased by 4,155 lots to 729,107 lots. Finally, LME aluminum ended the day up USD 44.5/mt or 2.20% to close at USD 2,064/mt. Latest LME aluminum inventories were down 1,500 mt to 4,869,925 mt.

Aluminum prices will move narrowly, as investors are staying wary ahead of the rulings from the Germany Supreme Court and the Fed interest rate meeting due on Wednesday. LME aluminum should struggle at USD 2,040/mt and move between USD 2,015-2,065/mt on Tuesday. SHFE 1212 aluminum contract is expected to open higher at RMB 15,850/mt on Tuesday, with prices between RMB 15,750-15,880/mt. Spot discounts are expected between RMB 150-100/mt due to weak fundamentals. Overall trading should stay quiet.