Aluminium on MCX settled down -0.32% at 107.70 tracking weakness from LME Aluminium which hit a one-month low of $1,598.50 before edging into positive territory in late trading and closing flat at $1,615 after upbeat factory data from top metals consumer China and a weak dollar spurred buying. Activity in China's manufacturing sector unexpectedly expanded at its fastest pace in nearly two years in August as construction boomed, suggesting the economy is steadying in response to stronger government spending. Today base metals could enjoy upward pressure in near-term as investors may rebuild some long positioning across the complex to play a possible macro stabilisation in China's economy. Now Market players are also looking ahead to Friday's nonfarm payrolls report, which could determine whether the Fed raises rates in September. The consensus forecast is that the data will show jobs growth of 180,000 in August, following an increase of 255,000 in the preceding month. Uptill now Aluminium strengthened in the second quarter, lifting prices 9.1 percent in the year to date in contrast with a 19-percent fall last year. As well as the effective and expected Chinese supply response to falling prices, the rally was supported by a seasonal pick-up in demand and a global recovery in metals fuelled by speculative buying. Technically market is getting support at 106.9 and below same could see a test of 106.1 level, And resistance is now likely to be seen at 108.5, a move above could see prices testing 109.3.

Trading Ideas:

Aluminium trading range for the day is 106.1-109.3.

Aluminium prices ended with losses on worries about oversupply.

Asian surcharges for physical aluminium are due to come under pressure in coming months due to increased exports from both China and India

Aluminum daily stocks at Shanghai exchange came down by 75 tonnes.