Commodity Trading Tips for Aluminium by Kedia Commodity

Aluminium on MCX settled up 1.6% at 123.45 as prices were supported by expectations Chinese smelters would shut over the northern hemisphere winter. Beijing encourages plants to close to curb pollution and free up scarce coal supplies for heating. LME stocks were down a net 4,700 tonnes to 2,244,175 tonnes and cancelled warrants were at 642,500 tonnes, down 5,350 tonnes. Aluminium prices were further buoyed on Friday amid rumours that China is planning to cut electrolytic aluminium and aluminium oxides capacities in three of its provinces. Rumours suggest that China will remove 30% of electrolytic aluminium capacity as well as 50% of aluminium oxide capacity in three provinces: Henan, Shandong and Shanxi. The Obama administration is expected to launch a complaint against Chinese aluminium subsidies with the World Trade Organization, a person familiar with the matter said. Chinese President Xi Jinping will promote "inclusive globalisation" at this month's World Economic Forum (WEF) in Davos and will warn that populist approaches can lead to "war and poverty", Chinese officials said. China's National Development and Reform Commission said it had approved 23 fixed-asset investment projects worth 184.0 billion yuan ($26.53 billion) in December. The latest IAI data release showed China’s aluminium production rebounded in November and LME stocks are seeing some large deliveries into warehouses, although the last was on January 4. Stocks set a low of 2.07 million tonnes on December 12; since then there have been eight large deliveries into warehouses – ranging from 14,775 tonnes to 34,050 tonnes – that have taken stocks to 2.22 million tonnes. Technically now Aluminium is getting support at 122 and below same could see a test of 120.4 level, And resistance is now likely to be seen at 124.4, a move above could see prices testing 125.2.

Trading Ideas:

Aluminium trading range for the day is 120.4-125.2.

Aluminium prices were supported by expectations Chinese smelters would shut over the northern hemisphere winter.

Aluminium prices were further buoyed amid rumours that China is planning to cut electrolytic aluminium and aluminium oxides capacities in three of its provinces.

Beijing encourages plants to close to curb pollution and free up scarce coal supplies for heating.