Aluminium yesterday traded with the negative node and settled -0.24% down at 106 as the Greek election led to cautious shorts standing on the sidelines. Weaker than expected May industrial output and Michigan University Consumer Confidence Index in the US rekindled stimulus expectations on Fed. The US dollar retreated, helping commodities rebound. LME aluminum, however, failed to take on the trend as other base metals did, hitting a new 2012 low and settling down $18.3/mt or 0.93% at $1,935.3/mt to extend its losing streak into the sixth trading day. The possibility of a Greek euro exit has dropped and investor focus now goes to Fed stimulus expectations, which may push for a rebound of aluminum prices. The global aluminium market will be more balanced this year and could shift into a supply deficit by 2013 as new projects fail to keep the pace with high-cost capacity cuts this year, Rio Tinto Alcan's CE said. Many higher-cost smelters in the 40-million-ton-a-year market have struggled to remain profitable after prices plunged almost a third in the past 12 months, to below $2 000/t. With power accounting for a third of production costs, smelters with long-term steady energy contracts or cheap hydroelectric power can survive the current turmoil. For today's session market is looking to take support at 105.7, a break below could see a test of 105.4 and where as resistance is now likely to be seen at 106.4, a move above could see prices testing 106.7.

Trading Ideas:

Aluminium trading range for the day is 105.43-106.73.

Aluminum fell on the increasingly bearish prospects of a glut in global supply and softer demand.

Possibility of a Greek euro exit has dropped and investor focus now goes to Fed stimulus expectations, may support prices

US announced its consumer sentiment sank to a 6-month low in early June, and that its manufacturing output contracted in May.