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Aluminium Prices Dip by -0.05% to 203.05 Amidst Chinese Policy Speculations

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Aluminium prices fell by -0.05% to 203.05, owing to gain booking after a period of support driven by hope about Chinese policy measures afterwards a seasonal lull. Pan Gongsheng, the governor of China’s central bank, announced the first reduction in reserve requirements for banks this year—50 basis points—beginning on February 5.

According to the World Bureau of Metal Statistics (WBMS), there was an 80,000-ton supply shortfall in November 2023 as a result of the world’s primary aluminium production reaching 5.8613 million tonnes and consumption reaching 5.9714 million tonnes.

Remarkably, the world produced 11.82 million tonnes of alumina and about 32.35 million tonnes of bauxite combined.

The global primary aluminium market saw a surplus of about 600,000 tonnes during the first 11 months of 2023, with 63.8 million tonnes of production and 63.2 million tonnes of consumption.

According to statistics from the IAI, the world’s primary aluminium output increased 2.1% year over year in December to 6.041 million tonnes. Furthermore, according to customs data, China’s imports of aluminium increased by 28% in 2023 due to strong demand and rising prices in the largest aluminium consumer market globally.

Technically speaking, the aluminium market displayed long liquidation symptoms, as open interest fell 1.9% and settled at 3871.

Prices have dropped by 0.1 rupees, but support is still at 201.7, and a breach there could lead to a test of 200.2. On the other hand, 204.2 is expected to be resistance; a break through there could push prices as high as 205.2.

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