Last Updated : July 30, 2010 15:55
Aluminium regains on falling inventory
Aluminium prices fell in the beginning of this month due to weak trend in base metals at the LME on fears of an uncertain US economy.
The prices showed uptrend since second week after positive trend was witnessed in the entire base metals pack and good demand at domestic markets. The news of rise in US primary aluminium production, rise in production and export of china and the rise in new home sales in US, boosted positive market sentiment for this metal.
The falling inventory further indicates the rising consumption demand for this metal. Aluminum consumption in cars has a huge potential for growth as carmakers would prefer to opt for the lighter metal, therefore future price movement will also depend on the growth of automobile industry.
The global demand excluding china strengthened in Q2. However, the aluminium consumption in China is expected to rise by 18% in 2010 according to Hindalco and global consumption is expected to be around 22.6 million tons (Reuters).
Therefore, we are bullish on this metal and expecting the prices in the upper range in the coming weeks. Aluminium traded firm in July in sync with other base metals. The light metal comfortably stayed above the psychological $2000/tonne mark at LME. At the present juncture, the market does appear to be mildly stretched on daily charts suggesting a likely correction in the near future.
On weekly charts the directional trend remains sideways. With a stiff resistance lying in the zone of Rs.9750100.30/kg at MCX, traders can look towards initiating short positions during the month of August.
Courtesy: Religare Commodities Get Trading Tips that suits your profile and budget
MCX LEAD 30 March 2012
contract was trading at
Rs 107.45 . What's your view on it?
