Aluminium settled flat as global aluminium output rises 3.9% y-o-y in October

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Aluminium settled flat as global aluminium output rises 3.9% y-o-y in October
Credit: © Reuters.

Aluminium closed with a marginal decline of -0.12%, settling at 202.9, influenced by a 3.9% YoY increase in global primary aluminium output in October, reaching 6.116 million tonnes, as reported by the International Aluminium Institute (IAI). Notably, China's primary aluminium imports surged by 173% YoY to 1.17 million mt in January-October, while exports saw a decline of 41.19% YoY. The resulting net imports reached 1.06 million mt, marking a substantial YoY increase of 347.33%. 

Chinese regulators, including the People's Bank of China, are reportedly creating a lending "whitelist" to support 50 property developers. In response to power curbs expected until April, smelters in Yunnan province initiated cuts of 1.15 million tons of capacity in early November. Yunnan, the fourth-largest aluminium-producing region in China, contributes around 12% to the country's total capacity. October witnessed China's aluminium imports rise for the fifth consecutive month, reflecting improved buying appetite amid robust demand and expectations of reduced domestic supply.

Technically, the aluminium market is undergoing long liquidation, evident in a significant 69.39% drop in open interest, settling at 469. Support is identified at 202.5, with a potential test at 202 on the downside. Resistance is anticipated at 203.7, and a breakthrough could lead to a test of 204.4. The aluminium market reflects a complex interplay of global production dynamics, trade patterns, and regulatory initiatives, shaping its price trajectory.

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