Aluminium on MCX settled down -0.05% at 109.50 traded in the range gave up early gains as the dollar gained further and data sets from Japan showed noted improvement as investors looked ahead to nonfarm payroll figures in the U.S. at the end of the week for a clearer view of a possible Fed rate hike this year. While after a dismal performance in 2015, aluminum has risen 10.3% year-to-date. It touched a 13-month high of $1,688 per ton and is currently hovering at about $1,661 per ton on the London Metal Exchange.
Aluminum has been supported by higher demand from the Chinese automobile industry coupled with a tightening supply due to the closing of some Chinese production capacities last year. The long-term demand outlook for aluminum continues to be positive on the back of higher demand from the automobile and transportation sector. Aluminum prices could get a further boost if gasoline prices remain under pressure.
Also China's parliament has proposed increasing tax benefits for companies that cut pollution by more than the national standard, state media reported on Monday, the first details of a much-anticipated new code aimed at curbing the country's emissions. Zhongwang USA LLC, backed by Chinese aluminum magnate Liu Zhongtian, said on Monday it would buy U.S. aluminum company Aleris Corp in a bet by the billionaire that the nascent U.S. automotive aluminum sector will be the industry's next big growth market.
The deadly collapse of a tailings dam last November at the Samarco mine, owned by Vale SA and BHP Billiton , was caused by drainage and design flaws, a report into Brazil's worst-ever environmental disaster showed on Monday. Technically market is getting support at 109.4 and below same could see a test of 109.2 level, and resistance is now likely to be seen at 109.8, a move above could see prices testing 110.
--Aluminium trading range for the day is 109.2-110.
--Aluminium traded in the range gave up early gains as the dollar gained and investors looked ahead to non farm payroll figures in the U.S. at the end of the week.
--Aluminum has been supported by higher demand from the Chinese automobile industry coupled with a tightening supply
--In China, market players will be looking out for data on the country's manufacturing sector, amid ongoing concerns over the health of the world's second biggest economy.
Courtesy: Kedia Commodities