Aluminum on the Rise: Is a Positive Price Trend Ahead?

Aluminum prices recovered from the monthly basis. Prices were supported after inventories rose in Shanghai and the United States did not impose sanctions on the Russian metal.

Benchmark aluminum ALI1 on the London Metal Exchange was up 0.2% at $2,185 a metric ton from an earlier session low at $2,175 as traders and consumers bought to lock in lower prices.

Prices of the metal used in the power, construction and transport industries hit a three-week high last week in anticipation of a U.S. package of sanctions against Russia, including metals.

Aluminum stocks in warehouses monitored by the Shanghai Futures Exchange jumped 65.6% last week to the highest since last May at 173,482 tons. Russian aluminium, at 3.8 million tons, amounted to nearly 6% of global supplies last year, according to USGS.

Market will continue to focus on US inflation data on Thursday for indications of when the Federal Reserve may cut interest rates, which would weaken the dollar.

In addition, weakness in the US currency will make dollar-denominated metals cheaper for holders of other metals. currencies Also on the agenda for Friday are surveys of purchasing managers in China’s manufacturing sector, which may shed light on the outlook for demand for industrial metals among the biggest consumers.

Technical Outlook – Aluminum

Aluminum prices found support from last month’s low of 197.80 (February 22, 2024) and rose to a high of 201.70. Yesterday, prices were up 0.07% on the day at 200.65.

On the chart above, prices continued above the important support of 197.00 from January 22, 2024. Prices are now close to the immediate resistance at the 23.6% Fibonacci Retracement from the previous low, indicating that prices may test the next resistance between 203.15-204.50.

On the price side, important support remains intact at 197.00, below which prices may pull. back to 195.00 and below.

Commodity Samachar
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