Aluminum - SHMET Import Market Briefing

Date 11/13/2017 5:18:38 PM Source: SHMET

Traders reported that spot premiums CIF shanghai remained at level $95-$115 as usual, so did the physical warrants. LME C-3m valued edged to $16.5C. SHFE Spot/LME 3M arb flattened out at 7.32, suggesting importing may lose around RMB1890/mt in spot market and RMB1915/mt in forward market.

We divide the price of aluminum into two parts: profit and cost, among which, the profit is determined by supply and demand, and the cost is made up of aluminum oxide and other prices. The expectations of the fell in cost price have led to the drop in aluminum price after a large loss in aluminum per tonne. However, we believe that the reduction in the operating capacity of aluminum oxide in heating season exceeds the limit of electrolytic aluminum production. The aluminum oxide will still have periodic tension and short term price has a pullback, but with small space. Today, electrolytic aluminum market sentiment remains weak and downstream enterprises are mainly purchasing on-demand. There is no obvious increase in the trading volumes, with speculators keeping stepping aside for the time being.



Edited by SHMET