Aluminium on MCX settled up 0.52% at 126.05 as prices recovered on short covering despite of concerns that Chinese supply is rising. A major aluminium producer has made an indicative offer of a premium of $125 per tonne to Japanese buyers for April-June primary metal shipments, up 32 percent from the last quarter, three sources directly involved in pricing talks said. The offer comes as premiums climb in the United States and Europe, and as some Japanese buyers face lower inventories due to healthy local demand. Japan is Asia's biggest aluminium importer and the premiums for primary metal shipments that it agrees to pay each quarter over the London Metal Exchange (LME) cash price set the benchmark for the region. Aluminium is at risk of a correction lower as pressure seen after Chinese inventories of aluminium look set to continue to increase over the coming weeks. As per market the contract will rise further at US$1,890-1,916 per tonne on Tuesday, February 21. As on February 20, LME official cash buyer price of aluminium stands at US$1,877.5 per tonne, cash seller & settlement price is US $1,878 per tonne, 3M buyer price is US$1,887 per tonne, 3M seller price is US$1,888 per tonne, Dec1 buyer price is US$1,933 per tonne, and Dec1 seller price is US$1,938 per tonne. Technically market is under fresh buying as market has witnessed gain in open interest by 0.22% to settled at 1356 while prices up 0.65 rupees, now Aluminium is getting support at 125 and below same could see a test of 123.9 level, And resistance is now likely to be seen at 126.7, a move above could see prices testing 127.3.

Trading Ideas:

# Aluminium trading range for the day is 123.9-127.3.

# Aluminium gained as prices recovered on short covering despite of concerns that Chinese supply is rising.

# China's home price growth slowed for the fourth straight month as demand cooled further in the biggest cities, official data showed.

# Aluminum daily stocks at Shanghai exchange came up by 401 tonnes.