Aluminium yesterday traded with the negative node and settled -1.02% down at 107.45 as International Monetary Fund further revised down its forecast for global economic growth for 2012 and 2013 on October 9. The IMF also warned that global economy will continue to deteriorate unless the euro zone debt crisis and the US fiscal tightening are under control. The EU finance ministers meeting overnight failed to yield any progress, triggering strong market risk aversion and pushing the US dollar index up to 80. In response, LME aluminum retreated below the 30-day moving average to a low of USD 2,044/mt, falling most sharply among base metals and hitting a near one-month low. Aluminum prices will expand losses due to massive sell-off. Recent study showed total aluminium inventories in China jumping by 100,000 tonnes over the National Day holiday period to around 1 million tonnes, Supply has swelled this year due to subsidies given to aluminium smelters by local governments. Market estimate an oversupply of around 700,000 tonnes in the Chinese market this year. In yesterday's trading session aluminium has touched the low of 107.25 after opening at 108.75, and finally settled at 107.45. For today's session market is looking to take support at 106.9, a break below could see a test of 106.3 and where as resistance is now likely to be seen at 108.4, a move above could see prices testing 109.4.

Trading Ideas:

Aluminium trading range for the day is 106.28-109.38.

Aluminium dropped as negative comments from the IMF will continue to depress markets.

IMF said the global economic slowdown was worsening and cut its growth forecasts for the second time since April.

EU finance ministers meeting overnight failed to yield any progress, triggering strong market risk aversion