The aluminium price rose to the highest level in two years yesterday. Intraday gains were more than two percent, the highest in four months, on concerns about commodities and the recent rise in copper.
Quarterly aluminium On the London Metal Exchange (LME), it rose 3.1% to $2,710.50 a tonne, touching $2,765.50, the highest level since early June 2022. MCX Aluminium rose 2.14% to settle at 247.65
The rally into the base metal continues weighting on sentiment. The rally was triggered by short covering on the U.S. Comex exchange that created momentum for speculators and funds to continue to pour money into the metal, betting on its increasing usage in the global green energy transition.
Copper hit a record $11,104.50 as a rally triggered by short covering created momentum for speculators and funds to bet on a potential long-term shortage of the metal in the transition to green energy.
Aluminium, used in the power, construction and transport industries, was also buoyed by supply worries after Rio Tin to RIO declared force majeure on third-party contracts for alumina exports from its refineries in Queensland, Australia.
Alumina is an intermediary product between bauxite and aluminium. “Other alumina producers may have trouble stepping into the breach so quickly and we therefore could see additional gains in both alumina and aluminium prices over the days ahead.
There is, however, no shortage of bauxite so the alumina feed is available, he added.
A drop in on-warrant aluminium stocks in LME-registered warehouses to a two-week low of 556,100 tons after 82,000 tons of cancellations provided further support.
Demand in top metals consumer China remains soft, with copper inventories in warehouses monitored by the Shanghai Futures Exchange (CU-STX-SGH) at seasonal record highs and Chinese refined copper output rising despite low treatment charges (TCs).
Technical Outlook – Aluminium Price
The Aluminium price touched a high 252.10 that was a highest level in a two year, and settled at 247.65 up 2.14%. The Aluminium Price continued in a speculative up trend since last week.
Formation of a long bullish candle stick on the above chart is still indicating for bullish momentum in a near future. Further, momentum oscillator RSI is also supporting the sentiment.
However, after a recent upward rally the aluminium price may consolidate in between the range of 254.50-240.00 before further upside move. On the upside, massive resistance is seen at 254.50 and a break above it prices will test next resistance 258-265.00
On the downside, immediate support is seen at 240.00 below it prices may retreat towards 232.00-225.00
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Commodity Samachar
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