Aluminium settled down -0.4% at 112.70 as tepid demand from principal consumption points like automobile, packaging and construction, yet to recover from the mauling of the world recession, has left the aluminium in deepest crisis. Industry giants from the US to Europe to China are sufficiently bedraggled by aluminium prices staying much below $2,000 a tonne. More, ingot physical premiums - the price buyers pay on top of the LME rate - are now compensating producers less than in the first half of 2013. This is in spite of premiums climbing to record highs of $250 a tonne from below $150 a tonne prior to 2008. High premiums have got much to do with aluminium stockpiles held at LME, mostly as part of financing deals. Interest rates in developed economies continuing to be low, operators have been quick to spot an opportunity to make profits by rolling over stocks and selling forward. Warehouse rents for storing aluminium are also low. While US President Barack Obama has put military action against Syria on hold and decided to pursue a diplomatic path, appeasing market apprehension. In response, US stocks rose, with the S&P recording a 7-day winning streak. But this failed to drive an upward shift in commodity prices. Investors chose to pull out of the market amid Syrian war issue and ahead of the FOMC's meeting due next week, sending LME down. Obama no longer insisted to launch a war against Syria, and said he had required the Congress to suspend a vote for the military action and seek for diplomatic plans. Technically market is getting support at 111.9 and below same could see a test of 111 level, And resistance is now likely to be seen at 114, a move above could see prices testing 115.2.

Trading Ideas:

Aluminium trading range for the day is 111-115.2.

Aluminium ended lower amid a still massive stock overhang linked to a problematic LME warehouse system.

Obama said the he would postpone the Congress vote on military action against Syria and seek diplomatic solutions

Aluminium daily stocks at Shanghai exchange came down by 477 tonnes