Aluminium settled down -0.66% at 105.25 as sentiments remain weak after the news that Alcoa Inc said it would close its Point Henry smelter and two rolling mills in Australia, underscoring the dire market conditions facing producers amid a flood of new Chinese capacity. Meanwhile, Russia's Rusal, the world's biggest aluminium producer, estimates that producers outside of China cut up to 1.2 million tonnes of capacity last year and further reductions of 1 million-1.5 million tonnes are expected in 2014. The price of aluminium - used in the aerospace, construction and automotive sectors - has nearly halved since 2008 due to a massive global surplus of the metal, forcing loss-making firms to slash capacity and make savings. The declines in aluminium prices have hurt Alcoa's so-called upstream operations, which mine bauxite, refine it into alumina and smelt alumina to produce aluminium. In response, it has been shutting down higher-cost smelting capacity and focusing on more profitable segments, such as its engineered products business. Alcoa's Australian Portland aluminium smelter will continue normal operations, as will bauxite mining and alumina refining operations in Australia, the company said. Technically market is under fresh selling as market has witnessed gain in open interest by 17.71% to settled at 4022 while prices down -0.7 rupee, now Aluminium is getting support at 104.6 and below same could see a test of 103.9 level, And resistance is now likely to be seen at 106.4, a move above could see prices testing 107.5.

Trading Ideas:

Aluminium trading range for the day is 103.9-107.5.

Aluminium gained supported by boosted by signs of improving access to credit in China

China's credit loans reached RMB 1.32 trillion in January, topping expectations and boosting market sentiment.

Aluminium daily stocks at Shanghai exchange came up by 18139 tonnes