Aluminium on MCX settled up 0.96% - Ways2Capital

Aluminium on MCX settled up 0.96% at 121.4 on short covering tracking LME prices closed 0.4 percent higher after touching its lowest since May 11 on Friday. China's securities regulator said it will encourage wealth management firms to invest in commodity futures in a bid to promote its domestic derivatives industry and raise the amount of commodities in the country's assets under management.

Home prices levelled off in China's biggest cities in May but continued to climb nationwide, indicating demand remains resilient despite government measures to keep the market from overheating. Confidence among Japanese manufacturers bounced in June to match a decade-high level recorded in April and is expected to rise for several months, a survey found, providing more evidence of economic recovery.

Some Japanese aluminium buyers have agreed to pay producers a premium of $119 per tonne for shipments in the July to September quarter, reflecting lower spot premiums, three sources directly involved in the quarterly pricing talks said. This is a 7 percent decline from the $128 per tonne premiums in the previous quarter and the first quarterly drop in three. Many other Japanese buyers are still negotiating with global producers, with further deals expected later this month.

Japan is Asia's biggest importer of aluminium and the premiums for primary metal shipments it agrees to pay each quarter over the London Metal Exchange (LME) cash price set the benchmark for the region. 

Technically market is under short covering as market has witnessed drop in open interest by -14.14% to settled at 2119 while prices up 1.15 rupees, now Aluminium is getting support at 120.7 and below same could see a test of 120 level, And resistance is now likely to be seen at 121.8, a move above could see prices testing 122.2.

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Suhani Verma

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