Aluminium prices fell by 2.15% to 241.6 amid market disappointment over the limited scope of China’s new fiscal stimulus measures aimed at stimulating economic growth. China introduced a support package to ease debt repayment burdens for local governments, but it fell short of the direct stimulus investors had hoped for. The potential for higher tariffs on China under U.S. President-elect Donald Trump also loomed over the metals market, adding to concerns about reduced demand for Chinese exports. In October, China’s aluminium production rose 1.69% year-on-year as capacity resumed following technical renovations, although some smelters failed to meet full operational expectations.
Downstream demand for alloy products remained stable with a modest uptick, and liquid aluminium output increased, reflecting robust demand in the peak production months of September and October. Additionally, China’s unwrought aluminium and aluminium product exports surged, reaching 5.5 million tons in the first ten months, a 17% increase from the previous year. Exports for October alone hit 577,000 tons, marking a 2.7% rise month-on-month and a significant 31% year-on-year increase. Production figures for September also highlighted a 1.2% annual growth, with daily output averaging 121,667 tons, slightly above August’s average. Profit margins for aluminium producers improved by 12.2% in September, with profits averaging 2,379 yuan ($334.04) per ton, bolstered by strong prices.
From a technical perspective, aluminium is undergoing long liquidation, as open interest dropped by 20.67% to 3,450 contracts, with a price decline of 5.3 rupees. Support is currently at 239.1, with a potential test of 236.5 if broken. Resistance is anticipated at 245.9, with prices possibly testing 250.1 if surpassed.