Aluminium settled up 0.42% at 108.5 as some investors rushed to buy the metal after China signaled it might take more forceful steps to stimulate economic growth. China's inflation rose to a 12-month high of 2 percent in August from 1.6 percent in July, the National Bureau of Statistics reported Thursday. China's PPI has dropped for 42 consecutive months, fueling expectation for more pro-growth measures. This helped improve market sentiment. In China has fended off the major risks to its financial system while its economic prospects remain positive, Premier Li Keqiang said on Wednesday, as he tried to reassure global markets that Beijing can keep its economy on track and stock markets in check. From the latest update that Century Aluminum Co, which is owned by Glencore PLC said it will close a potline at its Hawesville, Kentucky, smelter immediately as the U.S. producer prepares to shut the entire plant by the end of next month. Shutting the line at the 255,000-tonne-per-year plant will cut output by about 51,000 tonnes per year. The plant will be operating at about 60 percent of capacity, down from 80 percent, as a result of the move, the company said. LME aluminum climbed to USD 1,639/mt after opening at USD 1,626/mt on Thursday. The light metal fell back to USD 1,625/mt, but found strong support at the 5-day moving average, and finally ended up USD 6/mt at USD 1,634/mt. Technically market is under short covering as market has witnessed drop in open interest by -4.66% to settled at 3172 while prices up 0.45 rupee, now Aluminium is getting support at 108 and below same could see a test of 107.4 level, And resistance is now likely to be seen at 109, a move above could see prices testing 109.4.

Trading Ideas:

Aluminium trading range for the day is 107.4-109.4.

Aluminum prices gained as some investors rushed to buy the metal after China signaled it might take more forceful steps to stimulate economic growth.

The U.S. labour market appeared to gain momentum in early September as fewer Americans filed for weekly unemployment benefits.

Aluminium daily stocks at Shanghai exchange came down by 223 tonnes.