Aluminium on MCX settled up 0.76% at 126.05 buoyed by brighter data from the United States, and expectations of seasonally improving second-quarter demand. Sentiment was also boosted by secondary economic data in China that showed March activity was strong. The China Satellite Manufacturing Index rose to 51.8, its strongest level in five years, while a measure of sales manager activity also rose strongly. U.S. consumer confidence surged to a more than 16-year high in March amid growing labor market optimism while the goods trade deficit narrowed sharply in February, indicating the economy was regaining momentum after faltering at the start of the year. Some Japanese aluminium buyers have agreed to pay producers a premium of $128 per tonne for shipments in the April-June quarter, reflecting higher overseas spot premiums, two sources directly involved in the quarterly pricing talks said. LME "tom-next" aluminium – buying today and selling the day after - moved into backwardation, reflecting a lack of easily available nearby supply. Stocks in LME-registered warehouses have fallen 12 percent since March 1 to 1.92 million tonnes. Of this, 877,900 tonnes, or 46 percent, are cancelled warrants due to be delivered out of warehouses, suggesting tight aluminium supply in the LME system. China's central bank said it would provide financial support to help manufacturers upgrade and modernise, including measures to increase the scope for insurance companies to invest in the manufacturing sector. Technically market is under short covering as market has witnessed drop in open interest by -12.43% to settled at 1050 while prices up 0.95 rupees, now Aluminium is getting support at 125 and below same could see a test of 124 level, And resistance is now likely to be seen at 126.6, a move above could see prices testing 127.2.

Trading Ideas:

# Aluminium trading range for the day is 124-127.2.

# Aluminium gained buoyed by brighter data from the United States, and expectations of seasonally improving second-quarter demand.

# Aluminium for tomorrow/next day deliveries on the LME have flared into backwardation, reflecting a lack of easily available supply.

# Some Japanese aluminium buyers have agreed to pay producers a premium of $128 per tonne for shipments in the April-June quarter.