Technically Aluminium market is under fresh selling as market has witnessed gain in open interest by 38.1% to settled at 3552 while prices down 1.9 rupees.
Now MCX Aluminium is getting support at 134.9 and below same could see a test of 134.2 level, And resistance is now likely to be seen at 136.8, a move above could see prices testing 138.
Aluminium on MCX settled down 1.38% at 135.50 as fresh selling continuous in yesterday’s session tracking weakness from Shanghai aluminium prices which recorded their lowest close in 14 months on Monday, three days before winter output curbs on Chinese smelters are set to end and amid fallout from looming U.S. tariffs on metal imports.
Concerns over the impact of a trade war instigated by the U.S. tariffs on aluminium and steel continue to weigh on the sector. While Aluminium smelters in 28 northern Chinese cities were told to reduce output by at least 30 percent from Nov. 15 to March 15, although the actual volume cut was below expectations, putting pressure on prices.
There may only be a limited restart from March 15 as current prices are not high enough for some smelters to break even, industry sources say, but any extra supply will hit the market at a time when Shanghai aluminium inventories are at a record high.
Yesterday the most traded May aluminium contract on the Shanghai Futures Exchange ended down 1 percent at 14,065 yuan a tonne, its lowest close since Jan. 10, 2017. On Friday, the metal touched a low of 14,020 yuan a tonne.
While the United States opened the way for more exemptions from its steel and aluminum tariffs on Friday, after pressure from allies and intense lobbying from lawmakers, further diluting the measures just a day after they were formally announced.
--Aluminium trading range for the day is 134.2-138.
-- Aluminium dropped as pressure seen on news that winter restrictions on Chinese smelters set to be lifted in three days' time.
-- Aluminium smelters in 28 northern Chinese cities were told to reduce output by at least 30 percent from Nov. 15 to March 15.
--Some Japanese aluminium buyers have agreed to pay a premium of $129 per tonne for shipments from global producers in the April to June quarter.
Courtesy: Kedia Commodities