Aluminium achieves 22-month high – will the rally continue or not?

Aluminium achieves 22-month high - will the rally continue or not?

Aluminium prices sparked to 22-month highs on Monday. Prices witnessed an speculative jump after the U.S. and Britain banned the London Metal Exchange and CME from accepting new Russian production of the two metals

Aluminium and nickel futures rallied to multi-month highs during early trading on Monday following fresh sanctions by the U.S. and UK targeting Russian metals, though both contracts pared gains subsequently.

Russia is a major producer of aluminium and nickel. It also produces copper and some other metals.

Three-month aluminium on the London Metal Exchange (LME) HG1! jumped as much as 10.1% to a 22-month high in early trading, before paring some gains and was up 2.2% at $2,548.50. MCX Aluminum future hit 238.15, up 2.65%.

On Friday, Washington and London prohibited metal-trading exchanges from accepting new aluminium, copper and nickel produced by Russia and barred the import of the metals into the U.S. and Britain.

The sanctions aim to restrict revenues for Russia from the export of metal produced by companies such as Rusal and Nornickel that help fund its military operations in Ukraine.

The LME on Saturday banned from its system Russian metal produced on or after April 13. The CME Group suspended from its platform aluminium produced in Russia from April 13, the exchange said on Sunday.

Reduction in deliverable aluminium in those exchanges would give a boost to prices of the metal ex-China, said China Futures analysts. They anticipate more Russian aluminium to go to China as a result, adding to supply pressure, while encouraging more exports from China

Technical Outlook – Aluminium

Aluminum prices rose to their highest level in several months yesterday. Prices rose to 238.15 and settled at 232.45, up 2.65%. Since March 27, 2024, prices have risen sharply, more than 10%.

Prices pulled back slightly from the recent range and formed a high wave candlestick, indicating fear at higher levels. Although ongoing geopolitical and Russian and British sanctions on Russian metals may further support prices.

However, prices may face near-term resistance at 241.50 before another rise to the top. Therefore, should wait for the last long decline in the direction of 227.50-228.00.

In addition, prices above 241.50 will extend the rally towards 245.50-248. The downside is 222-220 and below it prices can pull to 218.35-215.00.

Happy Trading!

Commodity Samachar
Learn and Trade with Ease

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