Aluminium settled down -0.79% at 118.7 due to profit booking on weekend after prices rose as a gauge of global inventories dwindled amid signs of higher demand for the metal. Last Friday, market was still under the influence from the crashed Malaysian airliner which triggered concerns over political situation in East European. 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.

Demand remains solid, and available supplies are less than the market envisaged. The price of aluminium has reached its highest level for 22 months as falling inventories, smelter closures and a strong demand outlook continue to attract buyers. Aluminium, the second most widely used metal after steel, has been in the doldrums since the financial crisis as the market struggled to digest rising supply and towering stocks. But since slumping to a four-and-a-half-year low of $1,675 a tonne in February, the price has rallied sharply, helped by production cuts and an erosion of aluminium inventories at London Metal Exchange warehouses.

Aluminium for delivery in three months on the London Metal Exchange rose to test $1,990 a tonne, extending gains since the February low to more than 19 per cent. Technically market is under long liquidation as market has witnessed drop in open interest by -9.58% to settled at 7668 while prices down -0.95 rupee, now Aluminium is getting support at 118.2 and below same could see a test of 117.5 level, And resistance is now likely to be seen at 119.6, a move above could see prices testing 120.3.

Trading Ideas:

Aluminium trading range for the day is 117.5-120.3.

Aluminium dropped due to profit booking on weekend after prices rose as a gauge of global inventories dwindled amid signs of higher demand.

Stockpiles monitored by the London Metal Exchange extended a slump to the lowest in 22 months.

Demand remains solid, and available supplies are less than the market envisaged.