We signed off at the end of Thursday's premarket with aluminium looking like making no impact on 2700 on the upside, while still finding consumer support at the lower end. After spending the morning sessions hovering between 2680 and 2702, the market just wilted in the afternoon, sliding to a low after the kerb close of 2645.
Nearby spreads wilted too, with Dec20-27 rated Level (1.00b) and Dec27-Jan15 valued at 10.00c (7.00c). Forward backwardations were cut again to the end of 2009, with Mar-May'07 narrowing by $4.00/mth.
On Friday morning trading resumed in Asia at 2655. Exchange stocks rose in Shanghai and fell in London, though lending on nearby (throughout 2007) spreads appeared to pull the rug from under the market. The whole metals complex came off, though aluminium was particularly badly hit, tumbling through the 2620/40 layer of support and on through the 100- and 200-day moving averages. At time of writing 3-months had bottomed at 2566, though a bounce was underway, reaching 2605 currently, with longer term fund players still looking to acquire longs for further dates, locals reported. In their report as at last night, Cliff Green Consultancy wrote that a break beneath 2620 would signal a fall to 2550/60, where demand should be uncovered. They're right, so far…
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