Trading activities slow down in China’s spot aluminium market on cash crunch

Cash crunch at the month’s end has slowed down trading activities in China’s spot market for aluminium. Downstream producers in south China market have maintained a wait and watch stance against weakening SHFE ALUMINIUM.  Mainstream traded prices were 16,090-16,130 yuan/tonne in Guangdong, a premium of 90 yuan/tonne over Shanghai.

SHFE 1711 aluminum opened at RMB 16,320/mt on Monday and went up to RMB 16,525/mt in the afternoon. But, prices then fell back on short selling, and ended at RMB 16,450/mt. For SHFE 1711 aluminum, trading volumes rose to 283,892 lots. SHFE 1711 aluminium is expected to fluctuate at highs in the short term. 

Optimism in the aluminium market has proved beneficial for the stocks of major aluminium producers in China.  CITIC Trust spent $700 million in buying 10% of allotted shares issued by China Hongqiao, as said by Huang Pingyi, Deputy General Manager of China Hongqiao. The move by CITIC Trust is expected to help reduce Hongqiao’s financing costs in the long run.

CLSA Asia-Pacific Markets raised Chalco H shares to “buy” rating based on the bullish aluminium market.