28 JUNE 2016Shanghai Metals Market
SHFE aluminium to outperform LME aluminium
Edited by : AL CIRCLE
2 min read
The US dollar index kept rising following UK leave vote. A series of US economic data to be released later in the day will have temporary impact on the US dollar index.
LME aluminium will continue facing downward pressure from strong dollar and drop to USD 1,585-1,605/mt. Impact on SHFE 1608 aluminium from UK vote result has faded, and the contract should move at RMB 12,300-12,400/mt, supported by falling aluminium stocks in China.
In China’s spot aluminium market, spot premiums of RMB 20-60/mt are expected over SHFE 1607 aluminium contract.
Key macroeconomic indicators for base metal prices
Diverging trend is expected for base metals on Tuesday with focus on US Q1 annualized GDP, house price index in 20 cities for April and June Conference Board’s CCI.
Markets expect US Q1 annualized GDP to be revised up. US Q1 actual GDP was revised up limitedly, which shows uncertainty in US economic outlook. This may bode ill for the annualized GDP.
Stocks remain tight and house prices still grow recently in US property market. As such, house price index in 20 big cities may see upward momentum.
US June IBD and University of Michigan’s CCI fell short of forecast, which weakens consumers’ confidence in UC economic outlook. As a result, this may be reflected in the June Conference Board’s CCI.
Ratings agency Moody's has changed the UK's sovereign rating from "stable" to "negative" due to the uncertainty unleashed by the result of the EU referendum. And the agency significantly cut forecast for UK’s GDP growth in 2017 and 2018.
LME aluminium will continue facing downward pressure from strong dollar and drop to USD 1,585-1,605/mt. Impact on SHFE 1608 aluminium from UK vote result has faded, and the contract should move at RMB 12,300-12,400/mt, supported by falling aluminium stocks in China.
In China’s spot aluminium market, spot premiums of RMB 20-60/mt are expected over SHFE 1607 aluminium contract.
Key macroeconomic indicators for base metal prices
Diverging trend is expected for base metals on Tuesday with focus on US Q1 annualized GDP, house price index in 20 cities for April and June Conference Board’s CCI.
Markets expect US Q1 annualized GDP to be revised up. US Q1 actual GDP was revised up limitedly, which shows uncertainty in US economic outlook. This may bode ill for the annualized GDP.
Stocks remain tight and house prices still grow recently in US property market. As such, house price index in 20 big cities may see upward momentum.
US June IBD and University of Michigan’s CCI fell short of forecast, which weakens consumers’ confidence in UC economic outlook. As a result, this may be reflected in the June Conference Board’s CCI.
Ratings agency Moody's has changed the UK's sovereign rating from "stable" to "negative" due to the uncertainty unleashed by the result of the EU referendum. And the agency significantly cut forecast for UK’s GDP growth in 2017 and 2018.
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