Aluminium settled at 126.70 as depressed by China’s worse-than-expected manufacturing. Despite cool-down in manufacturing activities in China and the euro zone, three-month aluminum on the London Metal Exchange still rose to USD 2,113/mt after opening at USD 2,094/mt on Monday, lifted by technical momentum and tightening global supply. Prices, however, fell back to USD 2,085/mt later in the day before ending at USD 2,099/mt. China’s official manufacturing PMI, published on Monday, dropped to 51.1 in August, capping a 5-month rising streak, after advancing to 51.7 in July, the highest since April 2012. The National Bureau of Statistics reported that all small and medium companies saw their PMIs contract. Meanwhile, HSBC’s China final manufacturing PMI fell to a 3-month trough of 50.2 in August, with the sub-indices tracking output and new orders both down. SHFE and LME base metals price closed down since the decline in China’s manufacturing raised concerns over its demand for base metals. Last week Aluminum rose 1.74% and what is more important, the metal posted longest-ever streak of monthly gains as better than expected U.S. growth numbers added to signs of increasing metals demand and shrinking inventories. However, primary aluminum production at Aluminum Corporation in China (Chalco) plummeted 19.7% to 1.63 million tonnes in the first half of the year. Also supporting economic news attracted traders to buy aluminum this week. Technically market is under long liquidation as market has witnessed drop in open interest by -0.7% to settled at 7208 while prices remain unchange0 rupee, now Aluminium is getting support at 126.1 and below same could see a test of 125.4 level, And resistance is now likely to be seen at 127.4, a move above could see prices testing 128.

Trading Ideas:

Aluminium trading range for the day is 125.4-128.

Aluminium settled down depressed by China’s worse-than-expected manufacturing.

Primary aluminum production at Aluminum Corporation in China (Chalco) plummeted 19.7% to 1.63 million tonnes in the first half of the year.

Despite cool-down in manufacturing activities in China and the euro zone, three-month aluminum on LME still rose to USD 2,113/mt.