Aluminium prices edged up by 0.14% to settle at ₹216.35, supported by a tightening supply scenario and lower stock levels at key global locations. Notably, aluminium stocks at Japan's three major ports fell by 5.7% to 299,600 metric tons at the end of July, indicating a tighter market. Meanwhile, data from the London Metal Exchange (LME) revealed a shift in the origin of available aluminium stocks, with Russian-origin aluminium accounting for 65% of the stocks in July, up from 50% in June. In contrast, the share of Indian-origin aluminium in LME-approved warehouses dropped to 33% from 40%, reflecting significant outflows of Indian metal, which contributed to a 23% overall decline in on-warrant aluminium stocks on the LME.
On a global scale, primary aluminium output in June increased by 3.2% year-on-year to 5.94 million metric tons, according to the International Aluminium Institute (IAI). For the first half of 2024, global production rose by 3.9% to 35.84 million metric tons, with China leading the growth at a 7% increase to 21.55 million metric tons. The aluminium market in Asia has also tightened, as reflected by a 16%-19% increase in premiums for shipments to Japanese buyers for the July-September quarter, now set at $172 per metric ton.
Technically, the aluminium market is experiencing short covering, with open interest dropping by 6.06% to 3,691 contracts as prices gained ₹0.30. Aluminium is currently finding support at ₹214.9, with a potential test of ₹213.5 if support levels are breached. On the upside, resistance is expected at ₹218.3, and a move above this level could push prices towards ₹220.3.