Aluminium settled -1% down at 110.35 as there was a lack of progress in providing assistance to indebted Greece and Spain and German business confidence fell to the lowest since February 2010, exacerbating concerns over the European debt crisis. In this context, the US dollar was firm, weighing down commodities. LME aluminum drifted lower after a low opening overnight and fell most sharply among base metals. Aluminum prices will lack upward momentum necessary to rebound due to strong market risk aversion. On a positive note, a top official of the US Fed said that the central bank's latest round of monetary stimulus will help get the US economy back on track and speed the return to full employment. German business sentiment dropped for a fifth straight month in September, raising fears of recession, as companies struggled with a bleaker economic outlook and the ECB's bond buying plan failed to create much boardroom cheer. Madrid is holding back from applying for a bailout for fear that voters would dump them afterwards, dousing hopes of some investors that the highly indebted euro zone member would ask for a bailout at an EU summit on Oct. 18-19. For today's session market is looking to take support at 109.8, a break below could see a test of 109.3 and where as resistance is now likely to be seen at 111.1, a move above could see prices testing 111.8.
Aluminium trading range for the day is 109.25-111.75.
Aluminium fell as German business confidence fell to the lowest since February 2010, exacerbating concerns
Moody's ratings agency should wrap up a ratings review on Spain later this week.
Spain's economy minister said the country would not rush to seek external financial aid