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Technically Aluminium market is under fresh buying as market has witnessed gain in open interest by 1.98% to settled at 3812.
Now MCX Aluminium is getting support at 137.9 and below same could see a test of 136 level, And resistance is now likely to be seen at 141.3, a move above could see prices testing 142.8.
Aluminium on MCX settled up 1.86% at 139.75 tracking LME prices closed 1.1 percent higher at $1,974 a tonne after the United States and China agreed to a truce in a trade dispute that has undermined confidence in economic growth prospects.
Chalco has put 470kt of aluminium smelting capacity on ‘flexible production’ as a result of low aluminium prices and environmental requirements. Earlier Shandong province asked China Hongqiao Group to cut around 550mt pa of aluminium and 2mtpa of alumina production capacity in the province to reduce pollution.
This week metals traders will be monitoring trade developments after the U.S. and China agreed to a ceasefire in their trade war, while awaiting fresh indications on the direction of U.S. monetary and an update on the health of the U.S. labor market.
The US agreed not to increase the 10% tariffs on $200 billion worth of Chinese imports on Jan.1 following talks between U.S. President Donald Trump and his Chinese counterpart Xi Jinping over the weekend. The two sides will engage in new trade negotiations with the goal of reaching an agreement within 90 days.
If no new agreement is reached in this time the 10% tariffs will be raised to 25%. The U.S. non-farm payrolls report for November, scheduled to be published on Friday, is expected to show that jobs growth slowed while wage growth picked up slightly. An uptick in wage growth would help underline expectations for a December rate hike.
–Aluminium trading range for the day is 136-142.8.
–Aluminium rallied after U.S. and Chinese leaders brokered a truce in their trade conflict, a relief for the global economic outlook.
–Aluminum Corp of China Ltd, is cutting output on some of its aluminium production lines in northern China, as Chinese aluminium prices sank to a fresh two-year low.
–Social inventories of primary aluminium across eight consumption areas in China, including SHFE warrants, came in at 1.367 million mt down some 19,000 mt.
Courtesy: Kedia Commodities