Aluminum gains supported by a weaker dollar and signs of improving demand

Aluminium yesterday settled up by 0.17% at 203.85 supported by a weaker dollar and signs of improving demand from top consumer China. Global primary aluminum output rose 2.7% year on year in February to 5.273 million tonnes, data from the International Aluminium Institute (IAI) showed. Estimated Chinese production was 3.107 million tonnes in February, the IAI said. China's aluminum imports in the first two months of 2023 rose 11.3% from a year earlier, official data showed, as buyers anticipated improving demand for the metal following the country's reopening. Arrivals of unwrought aluminum and products including primary metal and unwrought, alloyed aluminum totaled 374,321 tonnes in January and February combined, according to the General Administration of Customs. That compares with 336,007 tonnes in the corresponding period last year. China dropped its strict COVID-19 restrictions late last year, buoying hopes of an economic recovery and better demand for industrial metals. Manufacturing activity in the world's second-largest economy expanded at the fastest pace in more than a decade in February. The first two months also saw domestic primary aluminum output climb 7.5% year-on-year to 6.74 million tonnes, the highest for the period since at least 2015, data from the National Bureau of Statistics (NBS) showed earlier this week. Technically market is under short covering as the market has witnessed a drop in open interest by -7.43% to settle at 3128 while prices are up 0.35 rupees, now Aluminium is getting support at 202.2 and below same could see a test of 200.3 levels, and resistance is now likely to be seen at 205.1, a move above could see prices testing 206.1.