MCX Aluminium may trade between 233.2-242.4 levels
Commodity Online | October 11 2021
UPDATED 10:40:58 IST

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Technically Aluminium market is under fresh buying as market has witnessed gain in open interest by 12.29% to settled at 402 while prices up 4.95 rupees.

Now MCX Aluminium is getting support at 230 and below same could see a test of 227.1 levels, and resistance is now likely to be seen at 234.4, a move above could see prices testing 235.9. 

Aluminium yesterday settled up by 2.17% at 232.85 boosted by strong demand and large shortages created by China imposing production curbs on high-polluting industries such as smelting to cut power use and emissions.

A widespread power shortage in China has raised concerns of slower growth and demand as the government has focused on limiting use by energy-intensive industries to lessen the impact on households.

Aluminium smelters can account for up to 7% of China's overall energy consumption, and up to 40% of the metal's production costs in China could be accounted for by power.The social inventories of aluminium and aluminium billet have been on the rise due to massive suspension of production across the downstream sector.

An alumina refinery in Jamaica that was damaged by fire and shut down in August is not expected to be back at 100% production for another year, until the end of September 2022.

On the fundamentals, the power shortage and energy consumption control has brought down the supply of aluminium. And the production costs of aluminium kept climbing amid rising prices of alumina and thermal coal.

Meanwhile, the National Food and Strategic Reserves Administration has decided to release the fourth batch of national reserves with an amount of 70,000 mt of aluminium, forming resistance against aluminium prices. 

Trading Ideas:
--Aluminium trading range for the day is 233.2-242.4.
--Aluminium gained as due to the impact of power rationing on aluminium foil production in Jiangsu and Zhejiang.
--Sentiments remain firm as the recovery of aluminium supply will be slow, while aluminium consumption is more resilient.
--Prices recently boosted by strong demand and large shortages created by China imposing production curbs on high-polluting industries.

Courtesy: Kedia Commodities

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