Commodity Trading Tips for Aluminium by KediaCommodity

Ajay Kumar Kedia 12 June 2014

Aluminium settled down -1.53% at 109.30 as the World Bank revised down its forecast for this year’s global economic growth to 2.8%. All Basemetals were weighed down Wednesday after the World Bank slashed its forecast for global economic growth. China’s Ministry of Finance said its financial revenue increased 7.2% YoY in May, but income tax from real estate companies declined for a fourth month straight, triggering concerns over metal demand. Moreover, China Household Finance Survey prepared by Southwestern University of Finance and Economics showed housing vacancy rate in China hit 22.4% in 2013, up 1.8 percentage points from 2011, adding to bearishness towards base metals markets. Investors remained cautious due to Qingdao’s investigation into metal financing, leaving trades in check. While United Company Rusal Plc, one of the world's biggest aluminium producers, pointed out in a statement that LME aluminium stocks have dropped to the lowest levels in 13 months. The company said that the stock trends through 2014 clearly support the view that the market is in significant deficit. RUSAL has previously forecast that the market is expected to have a market deficit of about 1.2 million tonnes this year and a further deficit of 985,000 tonnes in 2015 due to strong demand and capacity cutbacks by producers. Company sees the declining LME cash three month spread as indicating tighter conditions that are supporting the market. Technically market is under long liquidation as market has witnessed drop in open interest by -5.16% to settled at 3785 while prices down -1.7 rupee, now Aluminium is getting support at 108.3 and below same could see a test of 107.4 level, And resistance is now likely to be seen at 111, a move above could see prices testing 112.8.