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Aluminium Gains Amid Setbacks To Supply.

Published 27-05-2024, 03:37 pm
© Reuters.  Aluminium Gains Amid Setbacks To Supply.
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Yesterday, aluminium prices settled up by 0.82% at 241.1 amidst supply setbacks. Rio Tinto's declaration of force majeure on alumina cargoes from its Australian refineries due to gas shortages added to concerns about supply, given Australia's status as the world's second-largest producer of alumina. Additionally, uncertain meteorological conditions in China's Yunnan region, a key aluminium-producing area, threatened the availability of hydroelectric power for producers, further impacting supply. Meanwhile, on-warrant aluminium LME stocks in Port Klang, Malaysia, plunged after the key delivery deadline of May 15th, following trading giants' moves to take advantage of new contract rules post-US and UK sanctions on Russian aluminium. 

This jeopardized availability for clients reliant on specific non-Russian contracts. Data from the International Aluminium Institute (IAI) showed that global primary aluminium output in April rose by 3.3% year-on-year to 5.898 million tonnes. China's imports of unwrought aluminium and products surged by 72.1% year-on-year to 380,000 metric tons in April, reaching 1.49 million tons in the first four months, an 86.6% increase from the previous year. Specific origin data for imports will be released by China soon. Notably, Russian imports totalled 392,775 tons in the first quarter, a significant increase from the previous year. 

Technically, the market is experiencing fresh buying, with a 12.62% increase in open interest to settle at 3,248, while prices rose by 1.95 rupees. Aluminium currently finds support at 238.2, with a potential test of 235.3 if this level is breached. Resistance is likely at 243.5, and a move above could see prices testing 245.9.

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