LME aluminum should move between USD 2,060-2,100/mt on 13th Sep: SMM Morning Review

Germany’s Constitutional Court overnight ratified the bailout fund by the European Stability Mechanism (ESM) under condition that German liability in the rescue fund must be limited to 190 billion euros and that both chambers have the right to be consulted on the ESM's activities. In response, the euro was lifted and LME aluminum surged to a high of USD 2,099/mt during early European session, the highest since May 3. However, as market focus shifted to the results of the Fed interest rate meeting, LME aluminum trimmed gains due to selling at highs. Finally, LME aluminum ended the day up USD 7/mt or 0.34% to close at USD 2,080/mt, extending gains for a seventh straight trading day. Latest LME aluminum inventories were down 8,500 mt to 4,854,325 mt.

Aluminum prices will be trapped within a tight range as investors are wary prior to the results of the Fed interest rate meeting. LME aluminum should struggle at USD 2,080/mt and move between USD 2,060-2,100/mt on Thursday. SHFE 1212 aluminum contract is expected to open at RMB 15,800/mt on Thursday, with prices between RMB 15,750-15,850/mt. Spot discounts are expected to narrow to RMB 100-60/mt as the delivery data of the current-month contract approaches. Cargo holders will hold back goods somewhat, while downstream enterprises should purchase as needed. Trading activities are expected to be stable.