About 32% Chinese aluminium smelters see aluminium prices fall this week CATEGORY Market DATE 26/Jul/2016 SOURCE Shangha

SMM surveyed 44 Chinese aluminium smelters about their opinions over aluminium price outlook.

About 32 per cent of them expect SHFE 1609 aluminium to fall below RMB 12,450/mt and LME aluminium below USD 1,600/mt, citing 4 reasons. First, many aluminium processors in Inner Mongolia and Henan shut down for rectifications because of environmental protection crackdowns, which will reduce aluminium demand. Second, July is the traditional off-season, with orders down significantly at aluminium processors. Third, output release from aluminium capacity restarted in April will add to market supply. Fourth, CFTC data showed net long positions of the US dollar hit one-year high. Strong dollar, plus weak crude oil, will pressure metals prices. 

Another 57 per cent expects SHFE 1609 aluminium to stabilize at RMB 12,450-12,600/mt and LME aluminium at USD 1,600-1,620/mt. On the one hand, more aluminium ingots will arrive as railway shipments gradually return to normal, which will ease supply tightness. On the other hand, shorts are cautious about raising bearish bets. SHFE 1609 aluminium has found support at the 40-day moving average and met resistance at the 5-day moving average.  
The rest 11 per cent are bullish that SHFE 1609 aluminium will rise to RMB 12,400/mt and LME aluminium at above USD 1,625/mt. Aluminium stocks in domestic five major markets fell to 267,000 mt as of July 24, pushing up SHFE aluminium and spot premiums. Spot premiums in east China expanded to RMB 180/mt on Monday from last Friday’s RMB 150/mt. Traders stockpiled goods actively. Besides, expectations for monetary easing in China will also favour metals prices.

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