Commodity Trading Tips for Aluminium by KediaCommodity

Ajay Kumar Kedia 15 January 2014

Aluminium settled down -0.84% at 106.5 as the greenback strengthened after two Fed officials said the Fed should dial back QE3 at a faster pace. Aluminium supply deficit in aluminium market to reach 1.1 million mt in 2014, almost 51% higher when compared with the 2013 deficit of 726,000 mt. With reference to data, the global aluminium consumption during 2013 witnessed a rise of nearly 8% to 50.357 million mt. At the same time, the global production rose only 4.5% year-on-year to 49.631 million mt. China accounted for nearly half of the global aluminium production, producing 22.972 million mt. The Chinese production in 2013 fell just short of the country's domestic demand. The nonfarm payroll data continued to impact the market on Monday, Fed official Dennis Lockhart gave cautious backing to more QE cuts, saying that "the labor market is not as healthy as the improved unemployment rate might indicate, and the unemployment rate drop may overstate progress achieved." He also warned about risks arising from low inflation. However, the Fed official admitted that uncertainties surrounding the economy have reduced, and expressed his support to the Fed's decision to begin scaling back the bond buying program. The US government recorded a budget surplus of USD 53 billion in December, well above market forecasts. The surplus brings the government's budget deficit for the first quarter of fiscal year 2014 to USD 174 billion, 41% lower than the same period in 2013. Technically market is under fresh selling as market has witnessed gain in open interest by 22.8% to settled at 3775 while prices down -0.9 rupee, now Aluminium is getting support at 106.2 and below same could see a test of 105.7 level, And resistance is now likely to be seen at 107.3, a move above could see prices testing 107.9.