Aluminium on MCX settled down -0.2% at 125 while recovered from the day's low as support seen from the LME Aluminium prices which ended up 0.1 percent at $1,877 holding well above recent support levels. Aluminium prices got support in recent past and prices on LME hit a two-year high of $1,957 a tonne last week as China pressed on with plans to cut output by 30 percent over the winter heating season.
Now support also seen after Aluminium stocks at three major Japanese ports fell slightly from the previous month to 273,100 tonnes at the end of January, but were down from 368,100 tonnes a year ago. Three global aluminium producers have offered Japanese buyers a premium of $135 per tonne for shipments in the April to June quarter, up 42 percent from the previous quarter, three sources directly involved in the pricing talks said on Wednesday. The offer, if accepted, would mark the second quarterly increase in a row.
The higher offer comes as premiums rise in the United States and Europe and Japanese inventories are falling amid solid local demand. Japan is Asia's biggest importer of the metal and the premiums for primary metal shipments it agrees to pay each quarter over the LME cash price set the benchmark for the region.
Now trader are eyeing on update from US as growing expectations the U.S. Federal Reserve will hike rates next week have boosted the U.S. currency, which when it rises makes dollar-denominated metals more expensive for holders of other currencies, which could mean weaker demand. Technically market is getting support at 124.5 and below same could see a test of 124 level, And resistance is now likely to be seen at 125.7, a move above could see prices testing 126.4.