Shanghai Metals Market
LME aluminum should move between USD 2,080-2,130/mt on 4th Dec: SMM Morning Review
Edited by : AL CIRCLE
2 min read
China’s manufacturing PMI rose to a 7-month high in November. Risk appetite grew during the European session, pushing commodity prices up. The US November manufacturing PMI declined more than expected, increasing expectations for additional monetary policy easing, sending the US dollar index below 80. As a result, LME aluminum staged a strong rally overnight by jumping to a high of USD 2,125/mt. Positions surged by more than 10,000 lots. LME aluminum pared some gains at the tail of trading before finally ending the day up USD 26/mt or 1.25% at USD 2,114/mt. Latest LME aluminum inventories decreased 7,700 mt to 5,199,525 mt.
The US dollar index should be capped below 80, and this will help aluminum prices stabilize. LME aluminum should struggle at USD 2,100/mt and move between USD 2,080-2,130/mt on Tuesday. The SHFE 1301 aluminum contract is expected to open higher at RMB 15,400/mt, with prices at RMB 15,360-15,440/mt. Buyers and sellers should stand on the sidelines at the beginning of the month. Supply will remain ample due to tight cash flows at year’s end. Downstream buying interest should be limited and only middlemen will actively seek low-priced deliverable branded goods. Spot discounts are expected between RMB 70-110/mt and overall trading will be light.
The US dollar index should be capped below 80, and this will help aluminum prices stabilize. LME aluminum should struggle at USD 2,100/mt and move between USD 2,080-2,130/mt on Tuesday. The SHFE 1301 aluminum contract is expected to open higher at RMB 15,400/mt, with prices at RMB 15,360-15,440/mt. Buyers and sellers should stand on the sidelines at the beginning of the month. Supply will remain ample due to tight cash flows at year’s end. Downstream buying interest should be limited and only middlemen will actively seek low-priced deliverable branded goods. Spot discounts are expected between RMB 70-110/mt and overall trading will be light.
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