Shanghai Metals Market
Shanghai Metals Market Morning Review - 2012/1/10 Aluminum Market
Edited by : AL CIRCLE
2 min read
Shorts successively closed their positions after the New Year’s Day holiday with a supportive SHFE/LME aluminum price ratio. Both LME aluminum stocks and cancelled warrants are declining as a result, helping aluminum prices stabilize amid volatility in other base metals. The meeting between German Prime Minister Merkel and French President Sarkozy overnight again ignited hopes for a European recovery, which helped LME three month aluminum break through the 60-day moving average for the first time in six months and closing USD 35.5/mt or 1.72% at USD 2,099/mt.
China will release its CPI data for December today. It is widely agreed China’s CPI growth has dropped and investors will focus on industrial contraction. Negative fundamentals, however, have driving up possibilities of a reserve requirement cut by the Chinese central bank. Investors therefore are still cautious optimistic. As such, SMM expects LME three-month aluminum to struggle near the 60-day moving average and move between USD 2,080-2,130/mt during today’s trading. The most active SHFE aluminum contract, which may change to four-month contract today, is expected to move between RMB 15,950-16,100/mt. Spot aluminum is believed to trade at wider discounts of RMB 50-100/mt over the SHFE current-month aluminum prices. Overall deals will be quite limited, though, as stock replenishing demand is weak even ahead of the Chinese New Year.
China will release its CPI data for December today. It is widely agreed China’s CPI growth has dropped and investors will focus on industrial contraction. Negative fundamentals, however, have driving up possibilities of a reserve requirement cut by the Chinese central bank. Investors therefore are still cautious optimistic. As such, SMM expects LME three-month aluminum to struggle near the 60-day moving average and move between USD 2,080-2,130/mt during today’s trading. The most active SHFE aluminum contract, which may change to four-month contract today, is expected to move between RMB 15,950-16,100/mt. Spot aluminum is believed to trade at wider discounts of RMB 50-100/mt over the SHFE current-month aluminum prices. Overall deals will be quite limited, though, as stock replenishing demand is weak even ahead of the Chinese New Year.
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