MCX Aluminium under long liquidation; Support seen at 144.2

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Technically Aluminium market is under long liquidation as market has witnessed drop in open interest by 8.68% to settled at 1084 while prices down 3.95 rupees.

Now MCX Aluminium is getting support at 144.2 and below same could see a test of 143 level, And resistance is now likely to be seen at 147.6, a move above could see prices testing 149.8. 

Aluminium on MCX settled down 2.64% at 145.45 as demand will further weaken as the auto market struggles to clear inventories of modals under old emission standards.Prices also seen pressure as the US reached a deal to lift steel and aluminium tariffs on and .

With less than two months to go before some Chinese provinces and cities implement tougher vehicle emission standards, prices of secondary aluminium in are likely to see more downside as demand will further weaken as the auto market struggles to clear inventories of modals under old emission standards.

The Chinese government will require all light to adhere to tougher “China VI” emission standards by 2020 as part of efforts to combat pollution.In face of increasingly heavier environmental pressure, the new standards will go into effect in 2019 in certain prominent areas such as , Shenzhen and Shanghai. Automobiles are the major consumer of secondary aluminium alloy.The secondary aluminium market has already taken a hit from sluggish auto sales.

Data from the China Association of Automobile Manufacturers () showed that auto sales in China in January-April declined 12.1% from a year ago, 0.8 percentage points larger than the drop in January-March.According to the report from the University of Michigan, consumer sentiment improved substantially in the month of May, thanks to a spike in consumer expectations.

Trading Ideas:
–Aluminium trading range for the day is 143-149.8.
–Aluminium dropped as demand will further weaken as the auto market struggles to clear inventories of modals under old emission standards.
–Prices also seen pressure as the US reached a deal to lift steel and aluminium tariffs on Canada and Mexico.
–With less than two months to go before some Chinese provinces and cities implement tougher vehicle emission standards.

Courtesy: Kedia Commodities

Source: Commodityonline.com