Aluminium settled up 0.92% at 109.65 on signs that demand will pick up as economies gain in China, and the U.S. Prices were boosted spurred by targeted RRR cuts by China’s central bank, rising New York Fed’s manufacturing index and US industrial output. China’s central bank extended a cut in reserve requirements to some national lenders as officials try to support the economy without broader stimulus. In the U.S., industrial output increased more than forecast in May, while the Federal Reserve of New York’s Empire manufacturing report unexpectedly climbed this month as orders jumped. Chinese officials are trying to shore up an economy set for the weakest growth since 1990 without worsening credit risks fueled by an explosion in lending during and after the global financial crisis. From the supply side, aluminum markets are expected to be in a deficit of 1.3 million tonnes in 2014 as lower prices prompted miners to reduce output, according to United Co. Rusal. From the demand side, the metal found support on China’s imports. The preliminary data revealed that the world’s top consumer bought 340,000 metric tonnes in May, pushing total exports for the period between January and May to 1.5 million tonnes, up 6.3% from the same period last year.  Markets will stay cautious before the US Fed announces its policy decision. Technically market is under fresh buying as market has witnessed gain in open interest by 1.19% to settled at 2900 while prices up 1 rupee, now Aluminium is getting support at 109.2 and below same could see a test of 108.7 level, And resistance is now likely to be seen at 110, a move above could see prices testing 110.3.

Trading Ideas:

Aluminium trading range for the day is 108.7-110.3.

Aluminium ended with gains on signs that demand will pick up as economies gain in China, and the U.S.

Aluminum markets are expected to be in a deficit of 1.3 million tonnes in 2014 as lower prices prompted miners to reduce output

Aluminium weekly stocks at Shanghai exchange came down by 327 tonnes.