Aluminium prices ended with gains on talk that China might have to cut smelting capacity because of environmental concerns. Inventories of aluminium inched slightly lower to 2.3 million tonnes but are up nearly 10 percent over the last month. The supply would inevitably rise because many emerging markets producers were looking to produce at near record levels despite high stock piles. Aluminium has been neglected for so long and with copper and other metals going up, there is no reason why aluminium should do some catching up. The latest report published by the World Bureau of Metal Statistics (WBMS) indicates that global primary aluminum market has recorded a marginal deficit during the initial eleven months of 2016. As per the report, the market reported a deficit of 970,000 tons when matched with the deficit of 551,000 reported for the entire year 2015. The production of primary aluminum has dropped by 221,000 tonnes during the eleven-month period from January to November last year. The total reported stock of metal declined further by 27,000 tonnes during the month of November 2016. The stocks at the end of the initial eleven-month period stood at 2,644 kt, which is sufficient to meet 17 days demand. It must be noted that the stock levels at the end of 2015 had stood at 3,787 kt. The combined stocks held in London, Shanghai, USA and Tokyo exchanges totaled 2,242.5 kt at the end of November, down by 988 kt when matched with end-2015 levels. Technically market is under fresh buying as market has witnessed gain in open interest by 7.52% to settled at 2802 while prices up 1.7 rupee, now Aluminium is getting support at 124.3 and below same could see a test of 122.4 level, And resistance is now likely to be seen at 127.3, a move above could see prices testing 128.4.

Trading Ideas:

Aluminium trading range for the day is 122.4-128.4.

Aluminium prices ended with gains on talk that China might have to cut smelting capacity because of environmental concerns.

Inventories of aluminium inched slightly lower to 2.3 million tonnes but are up nearly 10 percent over the last month.

WBMS indicates that global primary aluminum market has recorded a marginal deficit during the initial eleven months of 2016.