Aluminium settled up 2.64% at 112.70 prices hit their highest levels in 9-1/2 months on Monday as inventories fell and speculators stepped up buying. Aluminum extended its two-week rally amid the ECB move and easing tenions in Ukraine. Moreover, expectations of a deficit on the market pushed the lightweight metal higher. Recently, United Co. Rusal, the world’s biggest producer, reported that global market was likely to swing to a deficit of 1.3mts this year. Also supporting prices, demand from Japan, the biggest importer of the metal in Asia, continued to strengthen. Last week, Japanese importers agreed to pay a record fee for the base metal, citing solid demand and production cuts. LME stocks fell another 7,600 tonnes on Monday and have declined 5.5 percent so far this year to the lowest in 13 months, although are still at 5.15 million tonnes. Meanwhile Russia's Rusal believes a combination of bullish physical and technical factors that emerged in recent weeks will send the benchmark aluminium price to challenge the April peak of $1,900 a tonne this week and possibly $2,000 in the coming months. United Company Rusal Plc, pointed out in a statement that LME aluminium stocks have dropped to the lowest levels in 13 months. On Monday, the People’s Bank of China announced a 0.5 percentage point cut in reserve requirements for banks with their proportion of loans issued to smaller enterprises and agriculture meeting requirements, giving a boost to the market. Technically market is under fresh buying as market has witnessed gain in open interest by 30.47% to settled at 5121 while prices up 2.9 rupee, now Aluminium is getting support at 110.9 and below same could see a test of 109 level, And resistance is now likely to be seen at 113.8, a move above could see prices testing 114.8.

Trading Ideas:

Aluminium trading range for the day is 109-114.8.

Aluminium gained as investors closing short positions due to concerns that Indonesia’s export ban could boost aluminium prices

LME stocks fell another 7,600 tonnes and have declined 5.5 percent so far this year, but are still at 5.15 million tonnes.

Aluminium daily stocks at Shanghai exchange came down by 175 tonnes.