Aluminum Prices Dropped As Aluminium Smelters In Yunnan Complete Production Cuts

Aluminium yesterday settled down by -1.01% at 206.65 as aluminum smelters in Yunnan completed production cuts, the market attention will focus more on the recovery of domestic consumption. It remains to be seen when the seasonal destocking will begin. Global aluminum producers have offered Japanese buyers premiums of $125-$145 per tonne for April-June primary metal shipments, up 45%-71% from this quarter. The offers, if agreed upon by buyers, would mark the first increase in six quarters and the highest level since the October-December quarter in 2022, reflecting a view from producers that demand from automakers is set to pick up.

The Chinese government set its 2023 growth target for its economy at around 5%, lower than last year's target of 5.5%, according to a government work report released at the opening of the country's annual meeting of parliament on Sunday, as the world's second-biggest economy began to emerge from three years of severe COVID-19 restrictions. The Chinese economy grew 3% last year, significantly missing the 2022 target and marking one of the slowest rates of growth in almost half a century. China's trade surplus increased to USD 116.88 billion in January-February 2023 combined from USD 109.7 billion in the same period of a year earlier.

Technically market is under fresh selling as the market has witnessed a gain in open interest by 3.62% to settle at 3836 while prices are down -2.1 rupees, now Aluminium is getting support at 205.9 and below same could see a test of 205 levels, and resistance is now likely to be seen at 207.8, a move above could see prices testing 208.8.

Trading Ideas:
# Aluminium trading range for the day is 205-208.8.
# Aluminum prices dropped as aluminum smelters in Yunnan complete production cuts
# Global aluminium producers offer Q2 premiums of $125 – $145/T
# China sets 2023 GDP growth target of around 5%