MCX Settled Aluminium Up 0.12% at 120.40

On MCX settled up 0.12% at 120.40 the least gainer in metals complex but still sentiments are firm as support seen after the update that a large part of the potential production cuts in China should already be priced (in). Aluminium has outperformed all other base metals (this year), despite amply supplied market. Meanwhile China will launch a crackdown to curb illegal expansion of aluminium capacity in the world's top producer of the metal, the China Non-Ferrous Metals Industry Association said on Wednesday.

While Aluminium prices still held near six-week lows as the market focused on rising supplies and exports from top producer China, lower output costs and higher inventories. China’s aluminium exports have risen in recent months. In May the country exported 460,000 tonnes of unwrought aluminium and aluminium products, up from April’s 430,000 tonnes. While data from the International Aluminium Institute showed China’s aluminium production last year accounted for 55 percent of the global total, estimated at nearly 59 million tonnes.

Its output has been rising since March. Aluminium stocks in LME approved warehouses are up around 13,000 tonnes this week to above 1.43 million tonnes. Stocks in warehouses monitored by the Shanghai Futures Exchange at 433,110 tonnes are more than four times the levels seen in January. 

Technically market is under short covering as market has witnessed drop in open interest by -8.43% to settled at 2563 while prices up 0.15 rupees, now Aluminium is getting support at 120 and below same could see a test of 119.4 level, And resistance is now likely to be seen at 121.2, a move above could see prices testing 121.8.

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Suhani Verma

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