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SMM Aluminum Market Morning Review (2013-5-31)
SHANGHAI, May 31 (SMM) – Economic Sentiment Indicator in the euro zone gained 0.8 points to 89.4 in May, capping forecasts and helping the euro rebound. The US Q1 GDP was revised to a 2.4% annual growth rate. Initial jobless claims in the US rose to 354,000 in the week ended May 25. Weak economic data suggest that the US economic recovery still meets hurdles. This eased worries that the US Federal Reserve will curtail QE3 for the immediate term, sending the US dollar index below 83. In response, LME aluminum leaped to USD 1,910/mt, outperforming other base metals. However, LME aluminum pared some gains at the tail of trading before finally closing 1.70% higher at USD 1,897.3/mt. Latest LME aluminum inventories increased 6,825 mt to 5,209,975 mt.
A weaker US dollar will help the light metal rebound. LME aluminum should challenge USD 1,900/mt and move within USD 1,880-1,920/mt on Friday. SHFE 1308 aluminum contract is expected to open higher at RMB 14,700/mt, with prices between RMB 14,670-14,750/mt. In spot market, trading will be thin on the last trading day of the month, but traders will still hold offers firm. Spot discount of RMB 20-60/mt is expected over SHFE 1306 aluminum contract prices.