SMM Daily Review – 2011/7/13 Aluminum Market

Most active SHFE 1109 aluminum contract prices opened higher at RMB 17,285/mt and slightly rose to fluctuate near the 5-day moving average in the morning session. In the afternoon, as other metals prices jumped, SHFE 1109 aluminum contract prices broke through RMB 17,400/mt near the tail of trading. Since strong resistance existed at RMB 17,400/mt, the closed price slightly fell to RMB 17,400/mt, up RMB 145/mt or 0.84% from previous trading day. Total positions increased by 4,622 lots to 321,216 lots. Though most active SHFE 1109 aluminum contract prices broke through RMB 17,400/mt with positions increasing by 2,888 lots to 99,726 lots, SMM expects SHFE 1109 aluminum contract prices to fluctuate near RMB 17,400/mt in the short term due to strong resistance.

Traded prices of spot aluminum on July 13 in Shanghai were between RMB 17,530-17,550/mt, with premiums of positive RMB 40-70/mt over SHFE current-month aluminum prices. In the morning, SHFE current-month aluminum prices opened higher but later slightly fell, limiting upward space of spot aluminum prices. While traders were actively moving their goods at prices above RMB 17,500/mt, purchasers remained cautious with transactions rarely reported. In the afternoon, despite SHFE current-month aluminum prices broke through RMB 17,500/mt, cautious sentiment was strong among both sellers and buyers in the spot aluminum market. As a result, only few quotes at RMB 17,550/mt were reported, but transactions were rare.