Aluminium on MCX settled up 0.2% at 123.7 amid deepening global shortage of aluminium. Investors were shelving rosy hopes for U.S. reform and rethinking strategies premised on Donald Trump's economic growth promises on Wednesday, as the President faced his loudest criticism yet over possible collusion between his election campaign and Russia. Average new home prices in China's 70 major cities rose 0.7 percent in April from the previous month, faster than the 0.6-percent gain posted in March.
Aluminum industry in China may face widespread reshuffling and more relevant policies might be released in the second half of this year after the major three aluminum producing provinces recently issued policies to crack down on illegal aluminum projects. The China Banking Regulatory Commission unveiled plans to publish a flurry of regulations later this year to control financial risks.
Economic growth in top metals consumer China will just about make Beijing's target of 6.5 percent this year, it slows from 6.9 percent in the first quarter. In aluminium, it’s clear that the new policies will have a positive impact in the medium and long term and we expect environmental permits to become harder to obtain, which will slow new capacity and support the prices.
Meanwhile, weaker than expected economic data poured cold water on expectations that U.S. economic growth would rebound in the second quarter of the year, after housing data fell below expectations. Technically market is under short covering as market has witnessed drop in open interest by -2.45% to settled at 2426 while prices up 0.25 rupees, now Aluminium is getting support at 123.4 and below same could see a test of 122.9 level, And resistance is now likely to be seen at 124.1, a move above could see prices testing 124.3.