Aluminium On MCX Settled Up 0.85%

Aluminium on MCX settled up 0.85% at 124.90 tracking firmness from LME Aluminium which rose 0.4 per cent to settled at $US1,927 after a surprise rise in China's PMI, and while the boost was short-lived it does beg the question as to whether better times are ahead for the industrial metal. Prices had been seen support since last month after the news that 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.

The National Energy Administration and state planner will inspect power stations owned by aluminium producers in the top six aluminium-producing regions of Xinjiang, Shandong, Gansu, Guangxi, Jiangsu and Shandong, the association said in a statement on its website. Many aluminium producers in these regions have set up power stations to help cut electricity cost and increase aluminium capacity, the association said. It did not provide further details.

The Chinese government is serious about forcing aluminium producers in 28 cities to cut output during winter, potentially slashing production by 1-1.5mtns, an official at China's top aluminium maker Chalco said last month. Now in the week ahead, investors will be focusing on Wednesday’s minutes of the Fed’s latest meeting for fresh cues on the timing of the next US rate hike. Friday’s US jobs report for June will also be closely watched.

Technically market is under fresh buying and getting support at 124.3 and below same could see a test of 123.7 level, And resistance is now likely to be seen at 125.3, a move above could see prices testing 125.7.

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Suhani Verma

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