Aluminum prices surged to a nearly 16-week high on Thursday, driven by optimism over stronger metals
demand after China announced fiscal stimulus measures alongside its recent easing of monetary policy
aimed at reviving its sluggish economy.
Additionally, Vietnam’s decision to extend anti-dumping tariffs on certain aluminum products originating
from China until October 2029 has further bolstered the market. These tariffs, ranging from 2.85% to
35.58%, were first imposed in 2019 to protect Vietnam’s domestic industry from the threat of dumping.
According to Vietnam’s trade ministry, the continuation of these tariffs is necessary to prevent further
damage to local producers.
Meanwhile, China’s yuan edged higher against the dollar, supported by positive investor sentiment amid
reports of potential additional stimulus measures to counter the economic slowdown in the world’s
second-largest economy.
As these factors unfold, the aluminum market is poised for further volatility, with the potential for gains
depending on the strength of demand recovery and the impact of these protective tariffs on global
supply dynamics.
The Chinese currency gained after Bloomberg News reported that Beijing was considering injecting up to
1 trillion yuan of capital into its biggest state banks to increase their capacity to support the struggling
economy.
Such a move would be the first time since the global financial crisis in 2008 that Beijing has injected
capital into its big banks.
China’s yuan has gained about 0.6% against the dollar this week as Beijing unveiled its biggest stimulus
since the pandemic to pull the economy out of its deflationary funk and back towards the government’s
growth target.
Despite the offshore unit briefly crossing the psychologically important 7-per-dollar level on Wednesday,
many market participants do not expect the yuan to breach the key threshold before the week-long
National Day holiday next week.
Technical Outlook – Aluminum Futures
Aluminum prices surged by more than 2% intraday yesterday, reaching a high of 239.30—the highest
level since June 2024—before closing at the same level. The chart shows a decisive breakout above
multiple resistance levels, forming a long bullish candlestick, signaling strong upward momentum.
In the near future, the momentum is expected to remain positive following this robust trend line
breakout. However, some consolidation around the 228-226 range is possible before the next upward
move.
On the downside, support is observed at 222.50-218.00, while resistance lies at 242.20, with further
levels at 245.50-248 above that.
Happy Trading!
Commodity Samachar Securities
We Decode the Language of the Markets
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