Shanghai Metal Market
SMM Morning Review - 2011/10/25 Aluminum Market
Edited by : AL CIRCLE
1 min read
The surge in LME aluminum prices continued overnight amid lasting optimism towards the EU Summit solution this Wednesday, positive China PMI data in October and rumors that China will ease its monetary policies. The metal closed 3.95% higher at USD 2,217.3/mt as a result. Total positions of the metal decreased 5,621 lots to 862,958 lots. Though LME aluminum gained for two consecutive days this week, transactions have contracted, indicating that investors are still cautious, which will limit the ability of LME aluminum to surge further.
The cautiousness may prevail today among investors as the EU Summit is to start tomorrow. We expect LME aluminum to consolidate at USD 2,200/mt today and will meet strong resistance at the 30-day moving average. The most active SHFE 1112 aluminum contract is expected to open above RMB 16,550/mt, but will meet resistance at RMB 16,700/mt. The downstream buying interest is low, but goods holders will actively sell their goods on capital pressures at month’s end. Spot premiums over the SHFE current-month aluminum price are expected to be RMB 10-40/mt.
The cautiousness may prevail today among investors as the EU Summit is to start tomorrow. We expect LME aluminum to consolidate at USD 2,200/mt today and will meet strong resistance at the 30-day moving average. The most active SHFE 1112 aluminum contract is expected to open above RMB 16,550/mt, but will meet resistance at RMB 16,700/mt. The downstream buying interest is low, but goods holders will actively sell their goods on capital pressures at month’s end. Spot premiums over the SHFE current-month aluminum price are expected to be RMB 10-40/mt.
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