Aluminium Prices Rise Following New Sanctions On Russian Metals

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Aluminium Prices Rise Following New Sanctions On Russian Metals
Credit: © Reuters.

 Aluminium prices surged by 2.65% to settle at 232.45, driven by new sanctions imposed by the US and UK on Russian metals. These sanctions aim to restrict Russia's revenue from metal exports, particularly aluminium, which is crucial for funding its military operations in Ukraine. The ban on Russian metal supplies and imports into the US and UK has sparked concerns about market uncertainty, with analysts suggesting that it may lead to a flood of old stocks hitting the market. Meanwhile, China's aluminium output in March increased by 4.19% year-on-year to 3.555 million metric tons, indicating a rebound in production as the impact of the Chinese New Year holidays faded. 

The resumption of production in aluminium smelters and the rise in aluminium liquid output contributed to the growth in output. With the first batch of production resumption expected to be completed by mid-April, production levels are anticipated to further increase in April. In addition to production trends, Goldman Sachs (NYSE: GS ) revised its forecast for China's economic growth this year to 5.0%, up from 4.8% previously, signalling optimism about the country's economic prospects. 

From a technical perspective, the aluminium market witnessed short covering, with a drop in open interest by -9.63% to settle at 3078 contracts, while prices rose by 6 rupees. Aluminium support is identified at 229.3, with a potential downside test at 225.9, while resistance is likely at 237.1, with a move above potentially leading to prices testing 241.5 levels.

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