SMM Aluminum Market Morning Review (2013-12-3)

SHANGHAI, Dec. 3 (SMM) – LME aluminum advanced to USD 1,754/mt after opening at USD 1,749/mt on Monday, helped by positive HSBC’s final China manufacturing PMI for November. The euro zone’s final manufacturing PMI for November was revised up, but PMI readings in France and Spain were disappointing, offering only marginal support to base metals. Markit’s final US manufacturing PMI in November came in at 54.7, and construction spending in the US grew 0.8% in October. Upbeat data rekindled speculation that the US Federal Reserve may wind down QE3 soon, pushing the US dollar index up and causing LME aluminum to slide to USD 1,736.3/mt and close USD 3/mt or 0.17% lower at USD 1,742/mt. Trading volumes added 4,511 lots to 11,092 lots, while positions contracted 4,511 lots to 728,019 lots. LME aluminum inventories grew another 1,325 mt to 5,471,750 mt, pressuring aluminum prices .

A stronger greenback will weigh on base metals. SHFE 1402 aluminum contract is expected to open at RMB 13,950/mt on Tuesday and move within RMB 13,940-13,980/mt. In spot markets, premiums of RMB 60-100/mt are expected over SHFE 1312 aluminum contracts.

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