Aluminium on MCX settled up 0.16% at 125.05 after update China is considering forcing aluminium producers to cut more output. China is a top producer of aluminum, and its ongoing battle against pollution could lead to production cuts and, subsequently, skyrocketing aluminum prices. According to a recent report, the aluminum price rally could also potentially be offset by the oversupply situation. Any kind of extreme market fluctuation would be dependent on the Chinese government following through on the shutdown of aluminum-rich provinces during the winter months. China is considering forcing steel and aluminium producers to cut more output, banning coal in one of the country's top ports and shutting some fertiliser and drug plants as Beijing intensifies its war on smog, a draft policy document shows. The Ministry of Environmental Protection (MEP) has proposed the measures in a draft policy document. If implemented, they would be some of the most radical steps so far to tackle air quality in the country's most polluted cities. If introduced, the steps would likely add further fuel to rallies in aluminium, steel and coal prices, which have been buoyed by China's efforts to shut excess capacity and clean up polluting sectors. Still, prolonged cuts in capacity will reignite worries about demand for raw materials like iron ore. The five regions affected are Beijing, the port city of Tianjin and the neighbouring province of Hebei, as well as Shandong, Shanxi and Henan. Technically market is under fresh buying as market has witnessed gain in open interest by 3.59% to settled at 2252 while prices up 0.2 rupees, now Aluminium is getting support at 124.6 and below same could see a test of 124.2 level, And resistance is now likely to be seen at 125.7, a move above could see prices testing 126.4.

Trading Ideas:

# Aluminium trading range for the day is 124.2-126.4.

# Aluminium ended with gains after update China is considering forcing aluminium producers to cut more output.

# Any kind of extreme market fluctuation would be dependent on the Chinese government following through on the shutdown of aluminum-rich provinces

# China's exports of unwrought aluminum were 390,000 mt in January, up 2.6% YoY.