Aluminium on MCX settled up 1.39% at 123.95 as expectations of steady growth in China supported prices. LME aluminium ended 2 percent higher at $1,834.50, the highest since May 2015. Traders said they were closely watching negotiations between Alcoa and the Australian government over allocating public funds to help keep the 300,000 tonnes per year Portland aluminium smelter near Melbourne in operation. Investors were looking ahead to GDP and industrial output data on Friday from China. China's economy likely grew by a steady 6.7 percent in the fourth quarter, the same pace as in the previous three quarters, supported by higher government spending and record bank lending that has stoked concerns about debt risks. U.S. consumer prices increased in December as households paid more for gasoline and rental accommodation, leading to the largest year-on-year increase in 2-1/2 years and signaling that inflation pressures could be building. Governments must undertake fiscal and structural reforms to reduce the inequalities amid rising populist backlash, the International Monetary Fund Managing Director Christine Lagarde said. After reporting a drop in U.S. industrial production in the previous month, the Federal Reserve released a report on Wednesday showing that production rebounded strongly in the month of December. The Fed said industrial production climbed by 0.8 percent in December after slumping by a revised 0.7 percent in November. Technically market is under fresh buying as market has witnessed gain in open interest by 6.01% to settled at 2487 while prices up 1.7 rupee, now Aluminium is getting support at 122.3 and below same could see a test of 120.7 level, And resistance is now likely to be seen at 125.2, a move above could see prices testing 126.5.

Trading Ideas:

Aluminium trading range for the day is 120.7-126.5.

Aluminium prices gained as expectations of steady growth in China supported prices.

China's economy likely grew by a steady 6.7 percent in the fourth quarter, the same pace as in the previous three quarters

After reporting a drop in U.S. industrial production in the previous month, the report showed that production rebounded strongly in the month of December.