LME aluminum to move between USD 1,860-1,890/mt: SMM Morning Review

According to minutes of latest interest rate meeting released by the Federal Reserve (Fed) overnight, most Fed members expressed the view that they would support the Fed to ease policies if economy fails to grow at a faster pace, which boosted market confidence. In response, the US dollar index dipped to a low of 81.434, the lowest since July, greatly pushing commodities to rebound. LME aluminum edged up to challenge the 30-day moving average and touched a near two-week high of USD 1,885.8/mt during European session. However, as investors remained wary, trading volumes shrank slightly and LME aluminum slid below the 20-day moving average at the tail of trading. Finally, LME aluminum ended the day up USD 1.3/mt or 0.07% at USD 1,870/mt. Latest LME aluminum inventories were up 2,400 mt to 4,912,350 mt.

Hints for further easing policies by the Fed helped aluminum prices edge up. LME aluminum will test support at the 5-day moving average and move between USD 1,860-1,890/mt on Thursday. SHFE 1211 aluminum contract is expected to open slightly higher at RMB 15,300/mt on Thursday and meet resistance at the 20-day moving average as long buying will be limited, with prices between RMB 15,240-15,340/mt. Supply should be sufficient and downstream consumption will remain sluggish as the month ends. Hence, spot discounts are expected between RMB 40-0/mt.