Aluminium On MCX Settled Down -0.99%

Aluminium on MCX settled down -0.99% at 120.15 to its lowest in a week after the U.S. Federal Reserve raised rates for the second time this year, boosting financing costs for industry. Also prices seen pressure after the update that Russian aluminium giant Rusal said it plans to boost its production by 19 percent from 2016 levels to 4.4 million tonnes by 2021, amid rising global demand.

Rusal, which is controlled by Russian tycoon Oleg Deripaska, said in a presentation it expected global demand for aluminium to grow by 4% to 5% per year until 2021 amid higher demand for "green" aluminium and advanced alloys. The Hong Kong-listed company also said it aims to use 100% non-carbon energy sources for its smelting assets by 2020, up 5 percentage points from the current level.

Rusal also hopes to increase sales of value-added products by 47% compared with 2016 to 2.5-million tonnes in 2020, it said in its May presentation published on its website. Meanwhile yesterday the Federal Reserve raised interest rates for the second time in three months and said it would begin cutting its holdings of bonds and other securities this year, signaling its confidence in a growing U.S. economy and strengthening job market.

While China's economy generally remained on solid footing in May, but tighter monetary policy, a cooling housing market and slowing investment reinforced views that it will gradually lose momentum in coming months. Technically market is getting support at 119.6 and below same could see a test of 119 level, And resistance is now likely to be seen at 121.2, a move above could see prices testing 122.2.

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Suhani Verma

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