MCX Aluminium may trade between 134.4-139.2 levels
Commodity Online | July 23 2020
UPDATED 10:40:50 IST

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Technically Aluminium market is under long liquidation as market has witnessed drop in open interest by 17.66% to settled at 569 while prices down 1.25 rupees.

Now MCX Aluminium is getting support at 135.4 and below same could see a test of 134.4 levels, and resistance is now likely to be seen at 137.8, a move above could see prices testing 139.2.

Aluminium yesterday settled down by 0.91% at 136.5 as a stronger dollar triggered profit-taking after prices gained as investor sentiment was bolstered after European Union leaders reached a deal on a 750 billion euro ($862 billion) recovery fund to help the region recover from the coronavirus crisis.

U.S. aluminium premiums climbed to their highest since April 23 at 9.98 cents a pound, signaling recovering demand outside of China.

The Chinese government will make fiscal policy more proactive, and prudent monetary policy more flexible, President Xi Jinping said.China’s primary aluminium output rose 2.42% year on year to 3 million mt in June (30 days), showed survey.

As of the end of June, there was 36.76 million mt among 41.23 million mt per year of existing primary aluminium capacity in operation, up 180,000 mt from a month ago, while operating rates across Chinese primary aluminium producers inched up 0.3 percentage point to 89% as high margins encouraged newly commissioned and resumed capacities to ramp up.

During the first six months of 2020, China’s primary aluminium output increased 2.93% year on year to 18.01 million mt, while consumption dipped 0.18% to 17.69 million mt.

The decline in consumption was much smaller than a drop of 2.39% seen in the January-to-May period as inventories maintained their steep fall amid mild supply increases and robust downstream demand.

Trading Ideas:
--Aluminium trading range for the day is 134.4-139.2.
--Aluminium dropped as a stronger dollar triggered profit-taking after prices gained as investor sentiment was bolstered after European Union leaders reached a deal.
--U.S. aluminium premiums climbed to their highest since April 23 at 9.98 cents a pound, signaling recovering demand outside of China.
--The Chinese government will make fiscal policy more proactive, and prudent monetary policy more flexible, President Xi Jinping said.

Courtesy: Kedia Commodities

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