Technically Aluminium market is under long liquidation as market has witnessed drop in open interest by 10.53% to settled at 2235 while prices down 2.2 rupees.
Now MCX Aluminium is getting support at 231.2 and below same could see a test of 230.1 levels, and resistance is now likely to be seen at 234.3, a move above could see prices testing 236.3.
Aluminium yesterday settled down by 0.94% at 232.25 as the social inventories of aluminium and aluminium billet have been on the rise as the downstream sector turned away from the high prices, and the demand has also been constrained due to power rationing.
While the supply of aluminium continued to fall amid intensifying power rationing, underpinning aluminium prices. 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.
The People’s Bank of China injected a total CNY 100 billion of 14-day reverse repos at an interest rate of 2.35 percent on September 29th 2021, the same as in the previous day, and marking the ninth straight day of cash injections in the financial system.
The central bank reinforced the moves aim to maintain liquidity in the banking system ahead of the National Day holidays. The moves are also seen as a sign the authorities are willing to support the financial system and avoid a big collapse and contagion due to the Evergrande crisis.
Trading Ideas:
–Aluminium trading range for the day is 230.1-236.3.
–Aluminium prices dropped as the social inventories of aluminium and aluminium billet have been on the rise.
–While the supply of aluminium continued to fall amid intensifying power rationing, underpinning aluminium prices.
–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.
Courtesy: Kedia Commodities
Source: Comodity Online
