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Technically Aluminium market is under short covering as market has witnessed drop in open interest by 15.72% to settled at 4406.
Now MCX Aluminium is getting support at 135.5 and below same could see a test of 133.2 level, And resistance is now likely to be seen at 138.9, a move above could see prices testing 140.
Aluminium on MCX settled up 2.57% at 137.60 gained tracking LME aluminium prices which gained 1.9 per cent to $US1,919 tracking gains from other basemetals while volumes are expected to be subdued this week due to the Lunar New Year holiday in China, which accounts for around half of global demand for industrial metals.
US President Donald Trump said last week he will meet Chinese President Xi Jinping soon to try to seal a comprehensive trade deal as Trump and his trade negotiator both cited substantial progress in two days of talks.
While China Hongqiao Group, the world’s top aluminium smelter, said on Friday it would gradually restart production from some of its pots after the shorter set of winter output curbs expired on Jan. 31.
Some of the restrictions on Hongqiao’s winter output were to run for four months from mid-November to mid-March but others only applied to December and January. In a statement to Reuters, the company said it would take around four months, until June, to fully resume production from the pots now being restarted.
Around 100,000t of aluminium production had been affected by the winter cuts, it added. Dollar gained with upbeat U.S. jobs data and optimism about U.S.-China trade talks.
Even as recent data from China suggested that the world’s second largest economy is slowing down, a bigger than expected jump in U.S. non-farm payroll employment and encouraging data on U.S. manufacturing activity eased concerns about U.S. economic growth.
–Aluminium trading range for the day is 133.2-140.
–Aluminium gained as overdone given falling stockpiles and efforts by top consumer China to stimulate growth.
–Aluminium stocks in LME approved warehouses stand at 1.3 million, near their lowest since May 2018, while stocks in ShFE warehouses are at 690,000 tonnes, down 30 percent since last May.
–CME Group has reinstated approved status for warranting aluminium produced by United Company Rusal after U.S. sanctions were lifted against the company.
Courtesy: Kedia Commodities