Yesterday, aluminium prices dipped by -0.83% to settle at 239.1, driven by fund selling of bullish positions amidst concerns over high interest rates dampening metals demand, particularly in China. Recent shortages of alumina, a key intermediary product in aluminium production, arose due to reduced output from China and disruptions to Rio Tinto (LON:RIO)'s Australian exports. Gas shortages compelled Rio Tinto to declare force majeure on alumina cargoes from its Australian refineries, raising supply concerns from the world’s second-largest producer. Despite these challenges, one global aluminium producer offered Japanese buyers a premium of $175 a metric ton for July-September, up 18% to 21% quarterly, signaling confidence in demand prospects.
Global primary aluminium output in April increased by 3.3% year-on-year to 5.898 million tonnes, according to data from the International Aluminium Institute (IAI). Notably, China's imports of unwrought aluminium and products surged by 72.1% year-on-year in April to 380,000 metric tons, with first-four-month imports totaling 1.49 million tons, an 86.6% increase from the previous year. Russian imports also saw a significant rise, totaling 392,775 tons in the first quarter, up 127.7% from the corresponding period last year.
Technically, the market witnessed fresh selling pressure, with a 1.75% increase in open interest to settle at 3,260 contracts while prices declined by -2 rupees. Aluminium now finds support at 237.7, with potential to test 236.2 if breached, while resistance is expected at 240.5, and a move above this could see prices testing 241.8.