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Long liquidation seen in MCX Aluminium
Commodity Online | December 31 2018
UPDATED 12:40:01 IST

NCDEX Mustard Seed likely to move in a range of 4092-4220

MCX Crude Palm Oil under short covering; Support seen at 553.7

MCX Mentha Oil likely to move in a range of 1188.5-1219.9

MCX Aluminium may trade between 133.1-134.1 levels

NCDEX Ref. Soya Oil under fresh buying; Resistance seen at 758

Technically Aluminium market is under long liquidation as market has witnessed drop in open interest by30.2% to settled at 1872 while prices down 0.95 rupees.

Now MCX Aluminium is getting support at 128.3 and below same could see a test of 127.2 level, And resistance is now likely to be seen at 131.2, a move above could see prices testing 133.

Aluminium on MCX settled down 0.73% at 129.5 on profit booking after prices seen supported amid recent supply cuts and some 800,000 mt capacity cuts agreed among Chinese biggest firms. With the arrival of winter, industrial output has taken a hit as the government intensifies a crackdown on pollution to restrict production in smoke-belching factories.

China’s top steelmaking city Tangshan asked steel mills earlier this month to cut extra output. Cash aluminium flipped from a discount to a $14 a tonne premium over the three-month contract, likely signalling greater availability of nearby supplies.

Chinese primary aluminium producers have operated in losses for six months and this triggered output cuts across high-cost capacity producers. Some 2.35 million mt of primary aluminium capacity has been cut this year and another 400,000 mt would be cut in December.

This, together with the slower commissioning pace of new capacity, is expected to lower December month-on-month output growth to 1.3%, with production at 3.04 million mt. In November, 36.31 million mt of primary aluminium capacity was in operation, down 3.12% from October.

Slower supply growth extended the inventory destocking cycle. As of December 6, social inventories of primary aluminium across eight consumption areas, including SHFE warrants, stood at 1.352 million mt, down 8.96% a month earlier, data showed.

Trading Ideas:
--Aluminium trading range for the day is 127.2-133.
--Aluminium dropped on profit booking after prices seen supported amid recent supply cuts and some 800,000 mt capacity cuts agreed among Chinese biggest firms.
--With the arrival of winter, industrial output has taken a hit as the government intensifies a crackdown on pollution to restrict production in smoke-belching factories.
--China’s top steelmaking city Tangshan asked steel mills earlier this month to cut extra output.

Courtesy: Kedia Commodities

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