Aluminium price recovered significantly last week. Prices rose sharply to a 14-month low on December 11 as signs of recovering demand responded to a recent slump.
The latest customs data showed that China imported 109,000 tonnes of unwrought aluminium alloy in October, up nearly 10% from a year earlier, suggesting that the country’s recent economic stimulus measures are supporting purchases of inputs by producers.
However, data from elsewhere still gave a pessimistic picture.
Norwegian aluminium giant Norsk Hydro revealed that the global economic downturn in the industrial and real estate sectors, in addition to slowing demand for electric vehicles in China, caused aluminium sales to drop by 57% in the third quarter.
Alcoa also suffered heavy losses when volatile energy prices hampered industrial activity.
Aluminium price fell to a 14-month low as expectations of adequate supplies from the LME system were reflected in a cash discount to three-month aluminium contracts last month. The discount was last around $40 per ton.
Technical Outlook – Aluminium Price on The Rise?
By December 11, 2023, aluminium price had recovered. Prices recovered from a low of 193.20 and jumped to a recent high of 204.70. Weekly, it stood at 203.70 from last week’s 195.60, up 3.71%.
The formation of a bullish engulfing candlestick pattern indicates bullish concern in the near future. Apart from this, RSI 14 and its 9 SMA also gives a positive crossover which also supports the bullish momentum.
Thus, a break above 205 will attract fresh bullish momentum and prices may rise to 207.50-212.50. On the downside, major support can be seen at 198.30-192.50.00.
Commodity Samachar
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