Technically Aluminium market is under long liquidation and getting support at 126.2 and below same could see a test of 125.2 level, And resistance is now likely to be seen at 127.8, a move above could see prices testing 128.4.
Aluminium on MCX settled down -0.24% at 127.05 tracking weakness from LME Aluminium which slipped 0.8 percent to $1,897 a tonne as trader book profit from there long position which was built mainly due the renewed concerns about potential closures of Chinese smelters to cut pollution.
In a sign of growing public anger about pollution, hundreds of residents in a northeastern Chinese city protested against the building of an aluminium processing plant. While sentiments still look firm for aluminium outlook as support seen after LME Aluminum prices hit $1,900 per metric ton this week.
Aluminum has surged 13% so far this year as China proposes supply cuts to fight pollution. We already seen at the beginning of January that China’s supply would be the most important price driver to watch this year.
In February, a Chinese government document proposed that about a third of aluminum capacity in the provinces of Shandong, Henan, Hebei and Shanxi be shut down over the winter months. If implemented, they would be some of the most radical steps so far to tackle air quality in the country of 1 billion’s most polluted cities.
China looks like it is taking air pollution seriously. Given that burning coal is the largest contributor to air pollution in China, industrial metals supply could shrink this year, particularly steel and aluminum.
Environmental closures are looking increasingly likely in China this year. Questions remain over whether the government will push through with large output cuts that will most definitely result in layoffs.
--Aluminium trading range for the day is 125.2-128.4.
--Aluminium prices slipped on profit booking which was built mainly due the renewed concerns about potential closures of Chinese smelters.
--Aluminum has surged 13% so far this year, as China proposes supply cuts to fight pollution
--Chinese government document proposed that about a third of aluminum capacity to be shut down over the winter months.
Courtesy: Kedia Commodities