Aluminum price slid to their lowest in over four months on Tuesday. The prices continued under in pressure with short positions buildup on high inventories, while market participants awaited a Federal Reserve policy meeting and U.S. data releases this week for further direction.
The most-traded three month contract for aluminium dipped to $2,239.5 per metric ton, its lowest since March 11. It last traded 2% lower at $2,244.
MCX Aluminum prices made a low 206.55, lowest levels after March 2024 and settled at 209.45.
Fast money continued to build up short positions on aluminium whilst the overall short positions for metals are also growing on LME. Aluminium stocks monitored by Shanghai Futures Exchange retreated slightly to 264,158 tonnes, but it remains the highest level in 15 months.
China, the world’s biggest producer, produced 3.67 million tonnes of aluminium in June, the most in nearly a decade. “LME aluminium may seek support at $2,234 per metric ton this week, failure of which could be followed by a drop towards $2,108.
Adding to this, mounting demand concerns from China also weighted on the senitment . The Chinese government refrained from passing stimulus to target the aggressive slowdown in the world’s largest manufacturing sector and reiterated its priority to steer the economy away from construction and industry to specialize in advanced technologies and new energies.
Today, Bank of Japan, and the Federal Reserve will concludes its two- days policy meeting. Although, markete is expected to keep rates unchanged, but softer U.S. jobs data in June, cooling inflation and comments from top Fed officials have prompted the rate futures market to more than fully price in a 25 basis-point cut in September.
The Bank of England and Bank of Japan also hold policy meetings this week. Market participants expect lower borrowing costs could support manufacturing, therefore metals demand.
Technical Outlook (Aluminum Price)
markeyAfter touching a four-month low of 206.55, Aluminum prices settled at 209.55 compared to the previous day’s close of 209.25.
Intraday prices resulted in a formation of hammer candle stick which is indicating for trend reversal in a near future. However, prices would need to cross above the immediate resistance 211.80 in order to test 215-218 again.
On the downside, crucial support is seen at 205.20 below it could expect to test 202.50-198.00.
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Commodity Samachar
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