Aluminium yesterday traded with the negative node and settled -0.09% down at 108.8 as china's aluminium output rose for a seventh straight month in May 2012 to a new record high as Chinese smelters continued to expand production while the rest of the world cut back. Spain's EUR 100 billion aids ignited bullishness in the market, but as practical measures are absent, pessimism is waning, pushing up the US dollar index and eroding gains of commodities. LME aluminum hit a high of USD 2,002/mt and closed down USD 12/mt or 0.6% at USD 1,974/mt. The European debt crisis will keep aluminum prices low. LME aluminum is not likely to reach the 10-day moving average and will move between USD 1,960-1,990/mt. Downstream will continue to purchase as-needed. Supply is sufficient and traders will actively lower quotations. But trading will remain light. While markets are worried that the euro zone's bailout fund could worsen Spain's financial situation, credit ratings agencies may cut the country's credit rating again. Risk aversion will cause the euro to fall during the day. For today's session market is looking to take support at 108.5, a break below could see a test of 108.2 and where as resistance is now likely to be seen at 109.4, a move above could see prices testing 109.9.

Trading Ideas:

Aluminium trading range for the day is 108.2-109.9.

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