Aluminium On MCX Settled Up 0.04%


Aluminium on MCX settled up 0.04% at 124.85 tracking firmness in LME prices settling at $1,929 after news on output cuts in Xinjiang supported the prices. China’s aluminum production and capacity in operation both rose in June. Aluminum output nationwide increased 20.2% year-on-year to 3.09 million tonnes in June, and rose 21.7% year-on-year to 18.3 million tonnes in H1. Aluminum capacity in operation totaled 37.61 million tonnes on an annualized basis in June, up 6.33 million tonnes from a year ago.

Aluminum ingot stocks in China’s five major markets (Shanghai, Wuxi, Nanhai, Hangzhou and Gongyi) returned to growth last week after falling for two weeks in a row. Total stocks in these five regions increased 10,000 tonnes week-on-week to 1.2 million tonnes. China's services sector grew at a slower pace in June as new orders slumped, signalling renewed pressure on businesses and pointing to a softening outlook for the economy.

Fund managers’ net long positions on LME aluminum stopped falling and began growing instead. According to the LME position report, net long positions held by fund managers on LME aluminum rose 923 lots or 0.7% to 137,000. Henan, one of China's major aluminum producing provinces, will weed out aluminum capacity that has been offline for more than one year before the end of 2018, according to a document recently issued by the provincial government.

This move will target a combined aluminum capacity of more than 500,000 tonnes at three local aluminum smelters. Technically now Aluminium is getting support at 124.5 and below same could see a test of 124 level, And resistance is now likely to be seen at 125.2, a move above could see prices testing 125.4.

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Suhani Verma

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