Aluminium settled up 0.26% at 114.45 as support seen from the LME aluminium price, which in some intraday trades at LME breached the psychologically important $1,900 a tonne, has risen to its highest since August 2013. The undoing of aluminium for a long time has been excess capacity outside China and its use leading to the buildup of stocks of over 5mt at LME warehouses. Equally big, if not larger, inventories are held at non-LME storehouses. Such large stocks coincided with major demand slump for all metals in the world's leading economies struggling to come out of recession. No wonder, aluminium, the second-most used metal after steel, crashed to a four-and-a-half-year low of $1,675 a tonne in February. The Chinese Premier Li Keqiang stated on Monday at a meeting with German Chancellor Angela Merkel that China is expected to meet the 2014 GDP growth target after its economy improved in the second quarter. Meanwhile, the PBOC recognized that China’s economic structure showed positive changes in the second quarter and it will employ flexible monetary policy to support the country’s economy. Nevertheless, latest data from the PBOC showed that China’s forex receipts plunged 99% to only RMB 361 million in May, indicating that supply and demand in the country’s foreign exchange market were reaching equilibrium. German industrial production declined in May by 1.8% MoM and grew by only 1.3% YoY, both missing April’s readings and expectations. European economic data released today will boost the market limitedly, and the market will remain cautious ahead of the announcement of economic data from China and the US. Technically market is under fresh buying as market has witnessed gain in open interest by 0.9% to settled at 6414 while prices up 0.3 rupee, now Aluminium is getting support at 113.6 and below same could see a test of 112.8 level, And resistance is now likely to be seen at 115.1, a move above could see prices testing 115.8.

Aluminium trading range for the day is 112.8-115.8.

Aluminium gained as support seen from the LME aluminium price, which breached the psychologically important $1,900 a tonne,

China is expected to meet the 2014 GDP growth target after its economy improved in the second quarter.

Aluminium for a long time has been excess capacity outside China and its use leading to the buildup of stocks of over 5mt at LME warehouses.

Warehouse stock for Aluminium at LME was at 5038525mt that is down by -10700mt.

BUY ALUMINIUM JULY @ 113 SL 111.80 TGT 114.20-115.50.MCX