China Aluminum Industry Chain Weekly 20130701

China Aluminum Industry Chain Weekly 20130701 Highlights:

Macro: Base Metal Volatility Up on Fed QE3 Announcement and Loosening of Liquidity Crunch in China

Fundamentals:  Spot aluminum stocks in east China fell by more than 40,000 mt last week as traders rushed to sell down inventories against the mid-year liquidity crunch.

Futures:   LME aluminum prices were capped under USD 1,800/mt last week, with the low-end price at USD 1,758/mt, the lowest level in four years. SHFE 1310 aluminum contract prices were more resilient, moving within a RMB 14,200-14,350/mt price range, but met growing resistance at RMB 14,300/mt in the second half of the week due to thin trading activity.

Key Benefits

SMM weekly reports can provide customers with latest market information in a faster

manner. SMM highlights changes in China's alumina and aluminum spot prices, as well as market movements. SMM exclusively publishes aluminum ingot spot inventory report, which enjoys the highest recognition on China market. SMM tracks prices of raw materials and supplementary materials for aluminum, and establishes the corporate break-even models.

Core Data

Alumina spot prices, aluminum profits and losses, component ratio of aluminum costs, regional selling prices for spot aluminum, China's spot aluminum ingot inventories, prices for aluminum supplementary materials

Background

China has been the largest aluminum producer and consumer in the world. Although LME aluminum prices remain the barometer for global aluminum prices, the continued speculation of Chinese factor and strong growth in Chinese consumption after the eruption of economic crisis in late 2008 have drawn more attention to China's

aluminum market. SMM has studied China's aluminum industry for a long term, and has closely contacted players in China's regional spot markets. Based on the firsthand information, we provide deep and timely analysis of spot transactions, inventory changes, cost components, and market supply and demand in China's alumina and aluminum markets. Meanwhile, SMM makes predictions of aluminum price trends based on China's market conditions, global fundamentals, as well as changes in global macro economic conditions.

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