Aluminium dropped as global aluminium output rises 3.9% year on year in October

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Aluminium dropped as global aluminium output rises 3.9% year on year in October

Aluminium prices recorded a decline of -0.32%, settling at 203.45, influenced by global factors and specific developments in China. Global primary aluminium output showed a year-on-year increase of 3.9% in October, reaching 6.116 million tonnes, as reported by the International Aluminium Institute (IAI). Notably, China's primary aluminium imports for January-October surged by 173% year-on-year to 1.17 million metric tons, contributing to a substantial net import increase of 347.33% YoY. In October, Chinese aluminium imports witnessed a remarkable rise of 221.19% YoY and 7.9% MoM to 216,600 metric tons. 

Concurrently, exports declined, resulting in net imports reaching 216,000 metric tons, up 223.4% YoY and 11.51% MoM. The data reflects China's robust buying appetite, driven by solid demand and expectations of reduced domestic supply. Chinese regulators, including the People's Bank of China, are reportedly formulating a "whitelist" lending support specifically for 50 property developers. Additionally, smelters in Yunnan province have initiated capacity cuts totalling 1.15 million tons in response to power curbs anticipated to last until April. Yunnan, the fourth-largest aluminium-producing region in China, contributes around 12% of the country's total capacity. 

Technically, the market is under fresh selling pressure, with a 3.22% gain in open interest, settling at 3272. Despite a modest decline in prices by -0.65 rupees, support is identified at 203.1, with a potential test of 202.8 on a breach below. Resistance is expected at 203.9, and a breakthrough could lead to prices testing 204.4.

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