Aluminium On MCX Settled Up 0.45%

Aluminium on MCX settled up 0.45% at 121.85 as prices gained on short-covering tracking firmness from LME Aluminium which ended up 0.7 percent at $1896 a tonne as support seen after China's appointed a new environment minister who has promised a "protracted battle" to clean up the nation's notoriously polluted air, water and soil. Upto last week Aluminium prices held near six-week lows as the market focused on rising supplies and exports from top producer China, lower output costs and higher inventories. 

While China's aluminium exports are rising, in May the country exported 460,000 tonnes of unwrought aluminium and aluminium products, up from April's 430,000 tonnes. China's aluminium production last year accounted for 55 percent of the global total, estimated at nearly 59 million tonnes, according to International Aluminium Institute. Its output has been rising since March. Aluminium stocks in LME warehouses are up around 13,000 tonnes this week to above 1.43 million tonnes.

Earlier this year LME Aluminium hit $1,981 in March, its highest since December 2014 on expectations of falling supplies from China, where an environmental crackdown could mean output cuts during the winter months starting in November. Now technically market is under short covering as market has witnessed drop in open interest by -24.19% to settled at 1664 while prices up 0.55 rupees, now Aluminium is getting support at 121.5 and below same could see a test of 120.9 level, And resistance is now likely to be seen at 122.3, a move above could see prices testing 122.5.

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Suhani Verma

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