Aluminium on MCX settled down -0.6% at 124.1 due to profit booking after support seen as LME Aluminium having touched a 20-month peak of $1,883 on Tuesday on reports of potential capacity cuts in China. After years of excess supply the global aluminium market may be turning a corner, as China seeks to cut capacity and the incoming Donald Trump administration ratchets up trade threats against the world’s largest producer of the lightweight metal. A glut of aluminium in recent years has decimated the US aluminium industry, where smelters were forced to shut down as Chinese imports rose. Now, after tackling excess capacity in coal and steel in 2016, there are signs Chinese authorities are turning their focus to aluminium, according to official and media reports. Last week the US launched a case at the World Trade Organisation targeted at the Chinese aluminium industry. It alleges that loans and subsidised energy in China enabled companies to sell primary aluminium at artificially low prices. Consumer sentiment in the U.S. unexpectedly improved to its best level in thirteen years in the month of January, according to a report released by the University of Michigan. The University of Michigan said its consumer sentiment index for January was upwardly revised to 98.5 from the preliminary reading of 98.1. Economists had expected the index to be unrevised. With the unexpected upward revision, the index topped the 98.2 reported for December to reach its highest level since jumping to 103.8 in January of 2004. Technically market is under long liquidation as market has witnessed drop in open interest by -13.17% to settled at 1484 while prices down -0.75 rupees, now Aluminium is getting support at 123.2 and below same could see a test of 122.3 level, And resistance is now likely to be seen at 124.8, a move above could see prices testing 125.5.

Trading Ideas:

Aluminium trading range for the day is 122.3-125.5.

Aluminium prices ended with losses due to profit booking after support seen on reports of potential capacity cuts in China.

After years of excess supply the global aluminium market may be turning a corner, as China seeks to cut capacity.

A glut of aluminium in recent years has decimated the US aluminium industry, where smelters were forced to shut down as Chinese imports rose