Commodity Trading Tips for Aluminium by KediaCommodity

Ajay Kumar Kedia 17 January 2014

Aluminium settled up 0.56% at 108.4 after the US dollar index fell ahead of major economic data from China slated for release next week. Market was little affected by Ben Bernanke’s last planned public remarks as the Fed's chief. The US initial jobless claims for last week were reported at 326,000, better than expectation and reflecting sustained recovery in labor market. December CPI growth advanced to 1.5% from 1.2%, matching estimates, but was still below the Fed’s 2.0% target. The Philly Fed manufacturing index for January was revised upward to 9.4. Aluminium inventories in warehouses registered by the London Metal Exchange (LME) have climbed to a record of nearly 5.5 million tonnes, more evidence of a market weighed down by oversupply. The price of aluminium , mainly used in transport and packaging, fell 13.2 percent last year and has extended its losses by nearly 1 percent so far in January. LME stocks have surged more than fourfold since the global financial crisis in 2008, with demand insufficient to absorb an output glut and producers reluctant to cut capacity. LME inventories rose by 38,800 tonnes on Wednesday from the previous day to 5,492,325 tonnes , data showed on Thursday. The previous record was 5,486,100 tonnes, set in July last year. Despite the abundance, however, most of the stocks are unavailable to the market because they are tied up in finance deals or stuck in removal queues at warehouses. Technically market is under short covering as market has witnessed drop in open interest by -20.65% to settled at 2406 while prices up 0.6 rupee, now Aluminium is getting support at 107.7 and below same could see a test of 107 level, And resistance is now likely to be seen at 109.2, a move above could see prices testing 110.