Aluminium settled down -0.76% at 124.25 finished mostly lower on demand concerns, after a preliminary gauge of China’s manufacturing sector showed a slower expansion than expected. While prices boosted on Wednesday rose to its highest level in almost 18 months after the udpate that deficit concerns after the World Bureau of Metal Statistics (WBMS) estimated that aluminium markets went from a surplus of 1.06Mt in 2013 to a 393kt deficit in 1H14. Yesterday despite positive US economic data, three-month aluminum on the London Metal Exchange still dropped to USD 2,057/mt on Thursday due to risk aversion before Fed Chair Yellen’s speech due on Friday and downbeat China manufacturing PMI. HSBC’s flash China manufacturing PMI for August came in at 50.3, missing forecasts and down from the previous reading. The light metal ended at USD 2,058.5/mt. In contrast, a series of economic reports from the euro zone were disappointing. The single currency area’s manufacturing PMI slid in August to 50.8, the lowest since July 2013, while its composite PMI dropped unexpectedly to 52.8. France manufacturing PMI fell further in August to a 15-month low of 46.5, but its composite PMI rebounded to 50. European and US stock indices rose across the board. LME base metals, except copper , pulled back following a rally. US Federal Reserve Chair Janet Yellen is slated to deliver a keynote speech on the labor market at the annual Kansas City Federal Reserve meeting late on Friday. The speech is expected to provide guidance for market participants on the US Fed’s monetary policy. Technically now Aluminium is getting support at 123.7 and below same could see a test of 123.2 level, And resistance is now likely to be seen at 125.1, a move above could see prices testing 126.

Trading Ideas:

Aluminium trading range for the day is 123.2-126.

Aluminum retreated from highs as industrial metals declined after worse-than-expected manufacturing data from China.

HSBC’s flash China manufacturing PMI for August came in at 50.3, missing forecasts and down from the previous reading.

Aluminium daily stocks at Shanghai exchange came down by 2726 tonnes.