LME aluminum should move between USD 2,070-2,110/mt on 28th Sept: SMM Daily Review

The Spain's draft budget for 2013 released overnight would cut overall spending by USD 51 billion, easing market worries over the euro zone debt crisis. Despite forecast-beating weekly jobless claims in the US, a string of other economic data were downbeat in the US including August durable goods orders, 2Q GDP final reading, capping upside room of commodities. In response, LME aluminum bucked the trend by rising in European session and broke through the 5-day moving average to a high of USD 2,100/mt. However, LME aluminum failed to break resistance at the 10-day moving average. Finally, LME aluminum ended the day up USD 30.3/mt or 1.45% to close at USD 2,110.3/mt. Latest LME aluminum inventories were down 7,550 mt to 5,064,250 mt.

HSBC will release China’s manufacturing PMI final reading for September on Friday. Aluminum prices should move narrowly as trading activities will be thin on the last trading day before the week-long holiday. LME aluminum should struggle at USD 2,100/mt, with prices between USD 2,070-2,110/mt on Friday. SHFE 1212 aluminum contract is expected to open near RMB 15,695/mt on Friday and move between RMB 15,630-15,730/mt. Trading will be thin and spot discounts are expected between RMB 70-50/mt since sellers and buyers should show little interest in entering the market as the holidays loom.