MCX Aluminium saw a minor decrease of -0.37% yesterday, closing at 203.85. The increase in aluminium stocks tracked by SHFE warehouses, which climbed by about 80% in February, garnered attention. Despite this, Yunnan, the fourth-largest aluminum-producing region in China, continued to restrict its output because of the yearly dry season.
As the state of the power supply improves, production is anticipated to start up again. But growth may be restricted because of planned maintenance at smelters and restricted power supply increases. On the other hand, positive data from China rekindled expectations for higher demand, suggesting that the decline in aluminium prices was contained.
China’s industrial activity exceeded market expectations in January-February 2024, rising 7% year over year.
Furthermore, due in part to increased smelter profits. China’s primary aluminium production increased by 5.5% year over year during the same period.
Even with the bright future, there have been worries recently about declining profits because of rising alumina prices. Which are a major source of raw materials for smelters. Furthermore, 93.6% more unwrought aluminium or related products were imported into China last year than the previous year, totaling 720,000 tonnes, a sign of strong demand.
Technically speaking, the market saw a long liquidation, with a significant decline in open interest of -12.73% to close at 2707. MCX Aluminium is presently finding support at 202.9, and 202 is a possible test level below it. Resistance is anticipat at 204.8 on the upside. And a move above it is likely to result in a test of the 205.8 mark.