Aluminium rose amid a decline in exchange stocks and the dollar weakened.

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Aluminium rose amid a decline in exchange stocks and the dollar weakened.
Credit: © Reuters.

Aluminium prices experienced a notable upswing, closing 2.17% higher at $211.95 per metric ton yesterday. This surge was attributed to a decrease in exchange stocks and a weakening US dollar . On-warrant aluminium stocks in LME-registered warehouses hit their lowest point since August 2022, dropping to 173,875 metric tons due to fresh cancellations of 51,000 metric tons in South Korea's Gwangyang. Furthermore, Japanese aluminium buyers negotiated a reduced premium of $97 per metric ton over the benchmark price for shipments in October-December, marking a 24% decrease from the previous quarter.

Japan's demand for primary aluminium saw a substantial decline, with a 16% drop in imports from a year ago in August, contributing to a 30% decrease for the year. The decrease reflects sluggish demand in the domestic construction sector and weak export activity. Primary aluminium ingot imports from January to August registered a 30% decrease compared to the previous year. In addition to this, Japan's shipment of aluminium sheets and extrusions faced a 5.1% decline in July year-on-year, marking the 17th consecutive month of decline, according to data from the Japan Aluminium Association.

From a technical standpoint, the market has seen fresh buying interest, with a 12.57% increase in open interest, closing at 4271. Prices rose by 4.5 rupees. Aluminium is currently finding support at 209, with the potential to test 206 levels if it falls below this mark. On the upside, resistance is likely to be encountered at 213.6, and a breakthrough could lead to prices testing 215.2.

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