Aluminium prices ended with small gains continuing its firm trend buoyed by dollar weakness. Chinese economic growth of 6.8 percent in the last quarter of 2016 will support sentiment, but also note that investment and industrial production data for December indicate slower demand growth. The supply would inevitably rise because many emerging markets producers were looking to produce at near record levels despite high stock piles. Aluminium has been neglected for so long and with copper and other metals going up, there is no reason why aluminium should do some catching up. The latest report published by the World Bureau of Metal Statistics (WBMS) indicates that global primary aluminum market has recorded a marginal deficit during the initial eleven months of 2016. As per the report, the market reported a deficit of 970,000 tons when matched with the deficit of 551,000 reported for the entire year 2015. The production of primary aluminum has dropped by 221,000 tonnes during the eleven-month period from January to November last year. Meanwhile, the Lunar New Year holiday, starting Jan. 27, is expected to subdue metals demand this month as Chinese factories close, sometimes for two to three weeks. In the week ahead, Trump's policy plans in his first days in office are likely to dominate headlines along with fourth quarter growth from the U. S. on Friday and from the U. K. a day earlier. Tuesday’s data on euro area private sector activity will also be closely watched. Technically market is under short covering as market has witnessed drop in open interest by -10.31% to settled at 2513, now Aluminium is getting support at 125.3 and below same could see a test of 124.4 level, And resistance is now likely to be seen at 127.4, a move above could see prices testing 128.6.

Trading Ideas:

# Aluminium trading range for the day is 124.4-128.6.

# Aluminium prices ended with small gains continuing its firm trend buoyed by dollar weakness.

# Chinese economic growth of 6.8 percent in the last quarter of 2016 also supporting sentiment.

# Aluminum daily stocks at Shanghai exchange came down by 851 tonnes.