After a number of consecutive sessions of high volume and promising technical patterns, the end of the week was a damp squib for aluminium on Friday. The market stuck to a narrow $37-range, ending the day at lows of 2708 in the aftermarket. After a quiet morning that saw exchange stocks in Shanghai rise 6,000t the mood was set by a set of US payroll figures that were in line with expectations, though contained an alarming drop-off in construction and manufacturing sectors. Locals also picked up on a report suggesting more woes in the US mortgage lending industry, all of which pointed to further slowing in the world's biggest economy.
The nearby dominant long remained at 90+% in this morning's WC warrant banding report from the LME (as at cob Thursday), though the advent of fund longs being rolled saw the C-3m structure ease significantly. Cash-Mar21 slipped from 21.00b to 16.00b, while beyond there all interim carries relaxed incrementally, swinging the overall C-3m spread from 3.00b to 4.00 contango. Forward backwardations were marginally firmer in 2007, though from 2008 to 2010 they eased by $1.00-$1.50/mth.
Volumes across the metals complex on Monday morning were described as 'pathetic' by one observer, with aluminium's 3-month turnover just creeping into four figures at time of writing. From 2710 the market had picked up to 2735 and while the 10- and 30-day moving averages had turned down, Cliff Green Consultancy suggested in a report that the market's latest down-leg was complete. The trading strategists had taken fresh longs on Friday, they reported, looking for 2800 initially, then 2900.
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