Aluminum Rose After China Announced Fresh Support For Its Ailing Property Sector.

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Aluminum Rose After China Announced Fresh Support For Its Ailing Property Sector.

Aluminium prices rose by 1.13% to settle at 242.45, driven by broad-based gains in base metals following China’s announcement of new support measures for its struggling property sector. The market also responded to a significant increase in on-warrant LME stocks at Malaysian Port Klang, which surged ahead of the key delivery deadline of May 15th. This surge reflects trading giants leveraging new contract rules after the US and UK's sanctions on Russian aluminium, raising concerns about supply availability for major Western clients. China’s primary aluminium production in April increased by 7.2% year-over-year, reaching 3.58 million metric tons, according to the National Bureau of Statistics (NBS). The average daily output for April was 119,333 tons, up from 115,806 tons in March. Rising aluminium prices both domestically and globally have supported this production growth. 

Additionally, a report by Antaike noted that average profits for China’s aluminium industry have risen to 3,615 yuan per ton, nearly double the levels from a year ago and 48% higher than the previous month. In Yunnan, China’s fourth-largest aluminium-producing region, some operations resumed in April, though the production outlook remains uncertain due to drought and reduced rainfall affecting hydropower supply. For the first four months of the year, China’s aluminium production totalled 14.24 million tons, marking a 7.1% increase from the same period last year, as per NBS data. 

Technically, the aluminium market is experiencing fresh buying, with a 2.04% increase in open interest to 2,400 as prices rose by 2.7 rupees. Currently, aluminium finds support at 239.8, with a decline below this level potentially testing 237. On the upside, resistance is expected at 244.1, and a move above this level could push prices towards 245.6.

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