MCX Aluminium may trade between 161.7-165.3 levels
Commodity Online | January 27 2021
UPDATED 10:40:21 IST

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Technically Aluminium market is under fresh buying as market has witnessed gain in open interest by 2.65% to settled at 775 while prices up 1.4 rupees.

Now MCX Aluminium is getting support at 162.8 and below same could see a test of 161.7 levels, and resistance is now likely to be seen at 164.6, a move above could see prices testing 165.3.

Aluminium yesterday settled up by 0.86% at 163.95 as optimism over a $1.9 trillion U.S. stimulus plan outweighed rising COVID-19 cases and delays in vaccine supplies.

World aluminium output rose by 2.5% to a record 65.3 million tonnes last year, with producers lifting run-rates as the aluminium price rebounded from its March lows.

China's giant aluminium smelting sector responded to soaring local prices with a 1.8-million tonne lift in annualised production over the second half of 2020.

November saw annualised run-rates exceed 39.0 million tonnes for the first time ever, according to the International Aluminium Institute.

This supply surge is coinciding with a wind-down in demand ahead of the Chinese Lunar New Year holiday period, with most expecting prices to weaken over the coming weeks and months as the market digests the extra production.

China may be running out of new capacity to flex as national production edges ever closer to the country's capacity cap of 45 million tonnes per year. The government has since 2017 been enforcing a strict old-for-new policy in the aluminium sector.

New smelters have only been permitted when matching older capacity is closed. Global primary aluminium output rose in December to 5.67 million tonnes, up 4.22% year on year, data from the International Aluminium Institute (IAI) showed. Estimated Chinese production was 3.28 million tonnes in December, the IAI added.

Trading Ideas:
--Aluminium trading range for the day is 161.7-165.3.
--Aluminium gains as optimism over a $1.9 trillion U.S. stimulus plan outweighed rising COVID-19 cases and delays in vaccine supplies.
--World aluminium output rose by 2.5% to a record 65.3 million tonnes last year, with producers lifting run-rates as the aluminium price rebounded from its March lows.
--Global primary aluminium output rose in December to 5.67 million tonnes, up 4.22% year on year, data from IAI showed.

Courtesy: Kedia Commodities
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