Technically Aluminium market is under short covering as market has witnessed drop in open interest by 12.28% to settled at 2215 while prices up 2.05 rupees.
Now MCX Aluminium is getting support at 241.5 and below same could see a test of 238.1 levels, and resistance is now likely to be seen at 247.8, a move above could see prices testing 250.7.
Aluminium yesterday settled up by 0.84% at 244.9 as the supply of domestic aluminium is likely to fall amid multiple factors.
First, the operating rates in Qinghai and Ningxia may fall in the month, with almost zero new or resumed operation activities. The recent heavy rainfall in Shanxi has blocked the transportation. Several cities in Henan also implemented the orderly use of power.
The power rationing is likely to affect the demand side as well, suppressing the demand in the seasonal high. The inventory of social aluminium ingot is likely to rise slightly to around 850,000 mt by the end of October. Generally speaking, the domestic supply and demand of aluminium will stay weak in the short term.
But the supply side will take longer time to recover. Bottlenecks in transportation and energy supply are pushing up costs for global miners but this should be temporary, the head of Antofagasta Minerals said.
The city of Harbin announced measures to support property developers and their projects, reassuring investors fearing a damaging debt crisis in China’s construction sector.
China released 150,000 tonnes of industrial metals from its state reserves in the fourth round of sales this year as it continues a campaign to ease supply tightness and tame high commodity prices.
Trading Ideas:
–Aluminium trading range for the day is 238.1-250.7.
–Aluminium prices rose as the supply of domestic aluminium is likely to fall amid multiple factors.
–First, the operating rates in Qinghai and Ningxia may fall in the month, with almost zero new or resumed operation activities.
–The inventory of social aluminium ingot is likely to rise slightly to around 850,000 mt by the end of October.
Courtesy: Kedia Commodities
Source: Comodity Online
