Aluminium prices rose 0.1%, settling at 200.9, as traders navigated a market marked by a lack of significant catalysts and low trading activity ahead of an extended public holiday in China, a major consumer of the metal.
The China Nonferrous Metals Industry Association’s report, which showed a 30% drop in aluminium goods exported from China to the EU covered by the bloc’s Carbon The border Adjustment Mechanism (CBAM) in 2023, added credence to the market’s cautious attitude.
In an effort to stop environmentally harmful imports from undermining its green transition, the EU implemented the CBAM in October.
For the 4th consecutive month, factory activity declined according to China’s official PMI data. However, the Caixin China General Manufacturing the purchasing manager’s (PMI) unanticipated rose to 50.8 in January 2024, exceeding market expectations.
The contradictory information points to a complex economic environment in China. Especially in the lead-up to the Lunar New Year holiday.
While this was going on, imports of primary metals increased to 1.54 million metric tonnes from 668,000 tonnes in 2022—barely missing the record amount in 2021.
In contrast, Japan saw a 26% decrease in primary aluminium imports to 1.03 million metric tonnes in 2023. As a result of weak demand from the manufacturing and construction industries.
Technically, the market for aluminium saw short-covering, as evidenced by the -3.59% decline in open interest that led to a settlement of 3516. Aluminium prices increased by just 0.2 rupees, finding support at 199.8, and if broken, could test 198.5. Resistance is anticipated at 202.4; a move above there might bring 203.7 up for testing.