Commodity Trading Tips for Aluminium by KediaCommodity

Ajay Kumar Kedia 20 February 2014

Aluminium settled up 0.42% at 107.8 after data showed that US PPI staged a 0.2% rise in January. More than five million tonnes of aluminium are stored in warehouses approved by lme and much more is kept outside these warehouses. The aluminium market will remain tough for producers in the forseeable future as high inventories weigh on prices and idled capacity is poised to resume output and cap any price rises. Minutes from FOMC's January meeting indicated the Fed may continue to cut its asset purchases by USD 10 billion per month, and raised concerns that the Fed could increase short-term interest rate earlier than expected. US PPI grew by 1.2% YoY and 0.2% MoM January, both beating forecasts. Its building permits fell 5.4% in January to an annual rate of 937,000, also falling short of expectations. Housing start tumbled 16% in January to a seasonally adjusted annual rate of 880,000. The housing data, however, were positive in the east areas despite severe weather conditions, adding to concerns over the US recovery. In response, Barclays slashed its Q1 growth forecast for US from 2.2% to 1.9%.Labor market further strengthened in the UK, with the number of people claiming unemployment benefits fell to a rate of 3.6% in January, the lowest level since December 2008. ILO unemployment rate climbed to 7.2% in the December quarter from 7.1% in the three months to November. Technically market is under short covering as market has witnessed drop in open interest by -28.43% to settled at 2533 while prices up 0.45 rupee, now Aluminium is getting support at 107.1 and below same could see a test of 106.5 level, And resistance is now likely to be seen at 108.5, a move above could see prices testing 109.3.