Aluminium settled up 1.44% at 119.65 tracking gained from LME Aluminum which rose to a 16-month high as a gauge of global inventories dwindled amid signs of higher demand for the metal used in construction, autos and cans. Stockpiles monitored by the London Metal Exchange extended a slump to the lowest in 22 months. South Korea is seeking to buy high-grade primary metal in bidding on July 29.

The price has climbed 10 percent this year. Inventories fell for the 12th straight session to 4.97 million tons, the lowest since Sept. 12, 2012. US housing starts fell to 893,000 in June on an annually adjusted basis, down for the second month to a low last seen in September 2013 and missing market expectations. The country’s June building permits also dwindled to 963,000, the lowest level since January. These negative housing data suggest that the US property market is still confronted with headwinds.

Meanwhile, US initial jobless claims for the week ending on July 11 dropped to a 9-week low of 302,000, a sign that the US labor market is recovering. The 4-week average of the jobless claims declined 3,000 to 309,000, a low not seen since June 2007. Also the final Eurozone CPI rose at an annualized rate of 0.5%, hovering at its lowest in more than four years, indicating that the single currency bloc is facing low inflation and risks of price fall. Technically market is under fresh buying as market has witnessed gain in open interest by 4.67% to settled at 8480 while prices up 1.7 rupee, now Aluminium is getting support at 118.4 and below same could see a test of 117.1 level, And resistance is now likely to be seen at 120.4, a move above could see prices testing 121.1.

Trading Ideas:

Aluminium trading range for the day is 117.1-121.1.

Aluminium gained more than +1% lifted by supply concerns despite mixed US economic data

Aluminium stocks in LME warehouses, which have fallen below 5 million tonnes, are down almost 9 percent since the start of the year.

Aluminium daily stocks at Shanghai exchange came down by 274 tonnes.