Aluminium settled up by 0.51% at 118.3 driven by robust demand in China and Beijing's effort to reduce production. LME Stocks and cancelled warrants were both 5,900 tonnes lower at 2,149,150 tonnes and 760,925 tonnes respectively. Spread tightness has returned, with some of the nearby dates moving into a backwardation. On the physical front, US aluminium premiums rose but they dipped in Europe due to the backwardated c/3s spread. LME stocks are low at 2,155,050 tonnes. SHFE stocks have sunk to 75,362 tonnes, a record low for 2016. Some big aluminum producers seek a premium of $95-$110 per ton from Japanese buyers for primary metal shipments in the January to March period, up 27-47 percent from the previous quarter, five sources involved in pricing talks said. Japan is Asia's biggest importer of the metal and the premiums for primary metal shipments it agrees to pay each quarter over the London Metal Exchange (LME) cash price set the benchmark for the region. Any increase in the quarterly premiums would mark the first rise in three quarters, and reflect tightening supply, although buyers said the initial offers were too high, the sources said. Aluminum stocks at three major Japanese ports fell 2.9 percent in October from the previous month to 278,200 tonnes, trading house Marubeni Corp said. Aided by the European Central Bank's monetary stimulus measures and other efforts, inflation in the euro area is expected to return to the bank's objective of below but close to 2 percent by 2018-2019, the European Central Bank President Mario Draghi said. Technically now Aluminium is getting support at 117 and below same could see a test of 115.6 level, And resistance is now likely to be seen at 119.5, a move above could see prices testing 120.6.

Trading Ideas:

Aluminium trading range for the day is 115.6-120.6.

Aluminium prices recovered from lows driven by robust demand in China and Beijing's effort to reduce production.

Some big aluminum producers seek a premium of $95-$110 per ton from Japanese buyers for primary metal shipments.

LME stocks are low at 2,155,050 tonnes and SHFE stocks have sunk to 75,362 tonnes, a record low for 2016.