Aluminium settled down -1.78% at 107.35 as concerns over China’s metal demand and weak US economic data reported Thursday weighed market on. The US retail sales grew more slowly than expected in May, and last week’s initial jobless claims also were above forecast and previous figures. In addition, the unrest in Iraq which pushed up crude oil prices but dragged down airline shares, causing the US stock prices to fall. Meanwhile Global aluminium producer Rusal indicated bullish trends in the light metal, mentioned several influential factors that have emerged in recent weeks. Aluminium Giant Rusal said that the global aluminium market was forecasted to meet a deficit of about 1.2million tonne in 2014 and an additional 985,000 tonnes in the next year. They also included that there would be expansion in several sites of Rusal. The company added that the beyond 2015, they were seeing a limited opportunities for adding capacity outside China as no new projects were in the drawing board for imminent development and the industry would remain under invested. The supplier said that within China the demand in 2013 of about 25.5mts was roughly equal to the production and will grow about 10% in 2014. Estimated capacity addition of 2.4 million tonne introduced in the year 2014 had been counterbalanced by the closure of 2.1mts of capacity due to the uneconomic plant operations. Technically market is under long liquidation as market has witnessed drop in open interest by -13.92% to settled at 3258 while prices down -1.95 rupee, now Aluminium is getting support at 106.5 and below same could see a test of 105.6 level, And resistance is now likely to be seen at 108.9, a move above could see prices testing 110.4.

Trading Ideas:

Aluminium trading range for the day is 105.6-110.4.

Aluminium dropped on disappointing US economic data and growing tensions in Iraq.

The ongoing probe into metal financing fraud in China and instability in Iraq will keep investors cautious.

Aluminium daily stocks at Shanghai exchange came up by 2763 tonnes.