Aluminium settled up 0.13% at 115.95 rallied tracking gained in LME aluminum which advanced to test USD 1,954.5/mt drawing strength from the latest comments by Alcoa Inc, the third largest producer in the world. Alcoa Inc has raised its forecast for the global supply deficit, citing China’s production cuts. The U. S. miner now expects the deficit to attain 930,000 tonnes this year compared to the previous projection of 730,000 tonnes.

Meanwhile, the surplus of alumina, main raw material for aluminum, is now forecast to decline to 800,000 tonnes versus a previous estimate of 2.2 million tonnes amid solid demand from China and a fall in supply from India. From dataside Eurozone industrial output declined 1.1% MoM in May, the biggest fall in 20 months. Meanwhile, European Central Bank President Mario Draghi reiterated at a quarterly policy meeting that the ECB will introduce quantitative easing (QE) if need be.

The International Monetary Fund agreed to this move, citing that it will help pull out the euro zone from the current economic downturn. Investors will stay cautious ahead of tonight’s testimony by Fed Chair Yellen and tomorrow’s release of China Q2 GDP. Technically market is under fresh buying as market has witnessed gain in open interest by 2.36% to settled at 6852 while prices up 0.15 rupee, now Aluminium is getting support at 115.3 and below same could see a test of 114.7 level, And resistance is now likely to be seen at 116.6, a move above could see prices testing 117.3.

Trading Ideas:

Aluminium trading range for the day is 114.7-117.3.

Aluminium prices ended with small gains despite the euro zone’s industrial output fell 1.1% in May.

Investors will stay cautious ahead of tonight’s testimony by Fed Chair Yellen and tomorrow’s release of China Q2 GDP.

Aluminium daily stocks at Shanghai exchange came up by 3814 tonnes.