SMM Morning Review - 2011/10/27 Aluminum Market

Positive news overnight include China said to fine regulate its macro economy at times appropriate, better-than-expected durable goods and new home sales data from the US, and that the German parliament approved the EFSF expansion plan, which helped metals prices surge. However, arguments over aids for Italy and Greece etc. countries indicated that a complete solution for the Euro zone debt crisis had to wait until the meeting later by European finance ministers, with metals trimming gains of the day.

LME aluminum surged above the 30-day moving average overnight to USD 2,250/mt, but failed to break through the mark as the EU Summit failed to provide a complete solution for the Euro zone debt crisis. The metal finally closed USD 8/mt or 0.36% higher at USD 2,219/mt, with both traded volumes and positions slipping. The resistance at USD 2,250/mt is strong as reflected by recent two days of trading.

SMM expects LME aluminum to consolidate at USD 2,200/mt and fluctuate between USD 2,200-2,250/mt today. The most active SHFE 1201 aluminum contract is expected to open above RMB 16,400/mt and fluctuate between RMB 16,380-16,580/mt. The spot aluminum market is expected to remain quiet today, with spot premiums maintained between negative RMB 10/mt to positive 40/mt over the SHFE current-month aluminum price.