Aluminium yesterday settled up by 0.13% at 225.2 amid prospects of more robust demand and fears of supply shortages. China has been taking significant steps to boost its economy and end the strict coronavirus-induced regime, lifting the outlook for metal demand and overshadowing global recession concerns. On the supply side, last year's output cuts at key European smelters, including Alcoa (NYSE:AA)'s San Ciprian smelter and Hydro's plant in Slovakia, lent further optimism to bulls. Global inventories now stand at just 1.4 million tons, down 900,000 tons from a year ago and the lowest since 2002. Aluminum hit an all-time high of around 4,100 USD/T in March 2022 in the aftermath of Russia's invasion of Ukraine.
The premiums for aluminum shipments to Japanese buyers for January to March were set at $85-$86 a tonne, down 13%-14% from the previous quarter, reflecting slack demand and high stocks. The figures are lower than the $99 per tonne paid in the October-December quarter and mark a fifth consecutive quarterly decline and the lowest premium since the July-September quarter of 2020. Japan is Asia's biggest aluminum importer and the premiums for primary metal shipments it agrees to pay each quarter over the benchmark London Metal Exchange (LME) cash price set the benchmark for the region.
Technically market is under short covering as the market has witnessed a drop in open interest by -3.77% to settle at 4439 while prices are up 0.3 rupees, now Aluminium is getting support at 223.8 and below same could see a test of 222.2 levels, and resistance is now likely to be seen at 227.2, a move above could see prices testing 229.
Trading Ideas:
# Aluminium trading range for the day is 222.2-229.
# Aluminum gains amid prospects of more robust demand and fears of supply shortages.
# China has been taking significant steps to boost its economy and end the strict coronavirus-induced regime, lifting the metal demand
# Global inventories now stand at just 1.4 million tons, down 900,000 tons from a year ago and the lowest since 2002.