Aluminium Settled Flat As The Market Focused

Aluminium settled flat as the market focused on rising supplies and exports from top producer China, lower output costs and higher inventories. Market is expecting that Shandong, Xinjiang and Inner Mongolia may release the list of aluminum smelters ordered to close illegal capacity. Japanese aluminium buyers have agreed to pay producers a premium of $118 to 119 per tonne for metal shipped during the July to September quarter, reflecting weaker spot premiums, five sources directly involved in the quarterly pricing talks said.

The deals, which mark a 7 to 8 percent decline from the $128 per tonne premium in the previous quarter, follow two quarters of rising premiums. 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.

Aluminum ingot stocks in China’s five major markets (Shanghai, Wuxi, Nanhai, Hangzhou and Gongyi) fell at a faster pace last week, despite the ongoing off-season. Aluminum extrusion and alloy producers in Guangdong reduced aluminum scrap use in favor of aluminum ingot and billet against environmental protection checks, allowing local aluminum ingot stocks to fall sharply.

This dragged down total stocks in domestic five major markets. Technically market is under long liquidation as market has witnessed drop in open interest by -3.56% to settled at 2738 while prices remain unchange0 rupees, now Aluminium is getting support at 119.4 and below same could see a test of 118.8 level, And resistance is now likely to be seen at 120.4, a move above could see prices testing 120.8.

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Suhani Verma

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