Aluminium prices dropped by 0.3% to ₹249.95, driven by ongoing concerns about U.S. tariffs on imports from Canada and Mexico, with President Donald Trump reiterating his threat of 25% tariffs. This heightened uncertainty overshadowed market sentiment, alongside broader concerns regarding global economic growth. The U.S. inflation data, which is expected to offer clues on interest rate outlooks, added to the pressure. The U.S. Federal Reserve decided to hold rates steady, signaling a cautious approach to rate cuts until inflation and employment data warrant further adjustments.
Meanwhile, markets in China, the world’s largest metals consumer, are closed for the Lunar New Year holiday until February 5, adding to reduced market activity. In terms of supply, global primary aluminium production increased by 3% year-on-year to 6.236 million tonnes in December, as per IAI data. Aluminium stocks at three major Japanese ports also saw a 13.2% rise, reaching 323,600 metric tons by the end of December. In China, 2024 aluminium production reached a record 44 million tons, though output will be capped to avoid excess supply. China's aluminium exports grew by 17%, totaling nearly 5.5 million tons in the first 10 months of the year.
Technically, aluminium prices are under long liquidation, with a drop in open interest by 1.39% to 3,700 contracts. Support is at ₹248.9, and a decline below this level could test ₹247.7. Resistance is at ₹251.4, and a move above this could lead to a test of ₹252.7.