Commodity Trading Tips for Aluminium by KediaCommodity

Ajay Kumar Kedia 24 July 2014

Aluminium settled down -1.96% at 119.90 falling from 16-month highs on concerns that higher prices will encourage more aluminium output back onto the market. Aluminum soared to a 16-month high amid upbeat reports from the top consumer, China, and a fall in the LME inventories. LME inventories registered a decline of 1% on a weekly basis and a 9.5% drop year-to-date. The lightweight metal also drew some strength from the latest deficit forecast from Alcoa. Alcoa, the third biggest aluminum producer, now expects global demand to outplace supply by 930,000 tonnes compared to previous prediction of 730,000 tonnes. At the same time, the climb in prices was limited as Macquarie, an investment group, said that more production will come in the second half of the year as smelters are likely to increase output amid higher prices. Yesterday International Monetary Fund (IMF) lowered its forecast for US GDP growth for 2014 from 2% to 1.7% on Wednesday in light of the country’s sluggish economy in the first quarter. The IMF, however, kept its outlook for US growth in 2015 and 2016 unchanged at 3%. Also the Chinese Premier Li Keqiang stated at a State Council executive meeting that China will maintain a stable monetary policy and ensure a reasonable growth in total credits to prop up the real economy. Some investors interpreted the statement as a sign of continuously easy monetary policy, which will help boost stock and commodity markets for recent trading days. Technically market is under long liquidation as market has witnessed drop in open interest by -12.22% to settled at 7150, now Aluminium is getting support at 119 and below same could see a test of 118.1 level, And resistance is now likely to be seen at 121.6, a move above could see prices testing 123.3.