Aluminium On MCX Settled Up 0.96% - Ways2Capital

Aluminium on MCX settled up 0.96% at 126.45 as support seen after dollar dropped after weakening U.S. economic data and troubles facing U.S. President Donald Trump. While LME aluminium shed 0.3 per cent to finish at $US1,943 after Chinese exports of semi-finished products rose 8.1% in April to 380,000 tonnes.

Sentiments remain bullish for Aluminium as support seen after the speculation that new aluminum production capacity has been halted in China as the Chinese government’s focus on air pollution, has resulted in a crackdown on a range of polluting industries.

This crackdown on output comes while the economy is performing quite well. Official data released last month showed China’s economy grew by a better-than-expected 6.9 percent comparing the March quarter to the same period in the previous year. That is up from 6.8 percent in the final quarter of 2016. Industrial production was also far better than forecast, growing at 7.6 percent in March compared to 6.3% in first two months of the year.

Speculators, meanwhile, have caught on to government proposals to cut aluminum output later this year and plowed into the SHFE aluminum market driving up prices. The LME has fallen back in recent days, probably on profit taking, but is still around the year’s highs having seen a steady upward trend during 2016.

Now Investors look ahead to the release of the Fed’s minutes for its April meeting on Wednesday, to gauge whether the Fed’s outlook concerning monetary policy has been impacted by recent economic data and geopolitical developments. Technically market is getting support at 125.1 and below same could see a test of 123.8 level, And resistance is now likely to be seen at 127.1, a move above could see prices testing 127.8.

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Suhani Verma

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