Technically Aluminium market under long liquidation as market has witnessed drop in open interest by 11.19% to settled at 3597 while prices down 1.85 rupees.
Now Aluminium is getting support at 137.7 and below same could see a test of 136.9 level, And resistance is now likely to be seen at 139.7, a move above could see prices testing 140.9.
Aluminium on MCX settled down -1.32% at 138.45 tracking weakness from LME Aluminium which closed down 0.5 percent at $2,163 as investors feared pollution-linked shutdowns in China would be offset by new capacity.
As per latest report that new China policy is giving the green light to some companies to build capacity in other provinces. Japanese aluminium buyers will pay up to 21 percent less in import premiums in the October-December quarter to reflect a slide in spot premiums. Meanwhile the U.S. Federal Reserve will publish minutes from its September meeting later on Wednesday.
A hawkish tone on interest rate rises could boost the dollar, making metals more expensive for holders of other currencies. Aluminium price hit a five-year high of $2,199 per tonne last month amid concerns that capacity cuts in top producer China, where the government is waging a war on pollution, will create shortages.
In the week ahead investors will be looking to Friday’s US data on inflation and retail sales will also be in focus. Markets will also be eyeing a speech by ECB head Mario Draghi for fresh clues on when the central bank will shift away from its ultra-easy policy.
--Aluminium trading range for the day is 136.9-140.9.
--Aluminium closed down as investors feared pollution-linked shutdowns in China would be offset by new capacity.
--Japanese aluminium buyers have agreed to pay producers a premium of $94 to 95 per tonne for metal shipped during the October-December quarter, reflecting weaker spot premiums.
--Japanese aluminium buyers will pay up to 21 percent less in import premiums in the October-December quarter to reflect a slide in spot premiums.
Courtesy: Kedia Commodities