Aluminium settled flat weak at 107.70 due to sluggish February manufacturing PMIs from the euro zone, market sentiment was depressed further, pushing down prices. HSBC's flash China manufacturing PMI hit a 7-month low of 48.3 in February, fanning apprehension over demand from the world's top metal consumer. Economic indicators released during the European trading hours came in mixed. US initial jobless claims last week rose on a weekly basis, but were higher than expected. Manufacturing sector in the US continued to expand. The euro zone's composite PMI was positive, but PMI readings from key members of the bloc were less than satisfying. In this context, the light metal crept up to USD 1,774.3/mt, but any upside space was limited. The HSBC flash China manufacturing PMI hit a seven month low of 48.3 in February, slumping from January's 49.5, with the sub-indices for output and new orders falling to the lowest in seven months. In addition, the People's Bank of China (PBOC) conducted a RMB 60 billion 14-day repurchase Thursday, RMB 12 billion higher than Tuesday's operation, allowing the central bank to drain a net RMB 108 billion from markets. The poor data and tightened liquidity will add to a drag on base metals. Technically market is under long liquidation as market has witnessed drop in open interest by -2.37% to settled at 2473 while prices down -0.1 rupee, now Aluminium is getting support at 107.1 and below same could see a test of 106.4 level, And resistance is now likely to be seen at 108.2, a move above could see prices testing 108.6.

Trading Ideas:

Aluminium trading range for the day is 106.4-108.6.

Aluminium ended with losses as investors continued to digest poor manufacturing PMI for China

The aluminium market will remain tough for producers in the foreseeable future as high inventories weigh on prices

Aluminium daily stocks at Shanghai exchange came down by 681 tonnes