Aluminium on MCX settled down -1.42% at 111.15 on profit booking tracking losses in LME prices by around 1 percent settling at $1675 after prices remained supported in last couple of sessions as Chinese smelters get squeezed by increasing raw-material prices, making it tougher for them to expand production. Aluminum stocks in China’s five major markets increased after the weeklong Chinese National Day holiday, but the growth was much lower than in years past. The rally in aluminum has been driven by strong Chinese demand, fueled by a credit and construction boom and lower-than-expected production. The metal traded in Shanghai has surged 18 percent this year and is near the highest level since April. In London, prices are up 11 percent in 2016. The market has become more balanced, with China boosting output by 2 percent this year. As a result, there will be a global deficit as high as 700,000 metric tons this year. China’s exports of aluminum in unwrought and product form have fallen slightly this year, giving some relief to world producers. Total shipments to end-September reached 3.47 million tons, down from 3.56 million tons a year ago, according to China’s customs data. In September 2016, China had exported 390,000 metric tons of unwrought aluminum—a YoY rise of 10.6%. This was preceded by yearly rises of 20.4% and 9.3%, respectively, in August and July. Higher Chinese aluminum exports are a challenge for producers elsewhere as Chinese exports put pressure on aluminum prices. Technically market is under long liquidation as market has witnessed drop in open interest by -22.17% to settled at 3894, now Aluminium is getting support at 110.5 and below same could see a test of 109.8 level, And resistance is now likely to be seen at 112.4, a move above could see prices testing 113.6.

Trading Ideas:

Aluminium trading range for the day is 109.8-113.6.

Aluminium prices dropped on profit booking tracking losses in LME prices by around 1 percent settling at $1675.

Aluminum stocks in China’s five major markets increased after the weeklong Chinese National Day holiday, but the growth was much lower than in years past.

Total shipments to end-September reached 3.47 million tons, down from 3.56 million tons a year ago.