MI Comment: Heavy lending as aluminium edges lower

Aluminium stayed well within the week’s trading range on Thursday as it slipped from an early high at 2751 to a pm kerb low of 2715, weighed on in part by sizeable forward lending. Lead was the strongest performer of the LME complex, though the rest were lacklustre with markets pausing as financial jitters receded. US initial jobless claims and factory orders data were benign, with focus turning to Friday’s non-farm payroll figures. Nearby spreads were unchanged, though locals noted heavy lending of forwards in the afternoon and as at evaluation rates beyond 3-months eased markedly. 2008 and H1 2009 eased by as much as $5.00/mth in places with 2010 losing $2.00/mth throughout. On Friday morning activity remained on the low side with prices still hovering either side of 2720 after SHFE stocks rose by more than 10,000t. At time of writing volumes via Select had yet to break into four figures as dealers awaited this afternoon’s US employment data. As at last night Cliff Green Consultancy kept immediate support pegged around 2710/20, with more demand expected near 2660/70. Locals attributed yesterday’s forward lending to lurking consumers, looking to lock in outright purchases on any move lower. Last at 2720.