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Aluminium May Witness Down, Buying Recommended At Lower Levels

ByCommodityOnline
Published 04/03/2014, 04:16 AM
Updated 05/14/2017, 06:45 AM



Aluminum has been rising for five consecutive trading sessions, going from $1720 to $1830 backed by the lower inventory and better cancelled warrants ratio from the LME. We believe that this is the major reason behind the continuous rise in aluminum prices. Meanwhile, other metals have also moved higher, supporting the commodity to trade on a positive note. There is also news that global supplies may be limited, supporting the metal to trade higher. The MCX April futures ended the day at Rs 108.40, up by Rs 2 from the previous close.

In Brazil, aluminum companies producing the metal at the lowest level in 12 years expect authorities to ration power supplies as a drought curbs hydroelectric generation and, Alcoa Inc. said it will cut output at two smelters. Russia’s United Co. Rusal, the biggest producer, said its output would fall to the lowest in at least eight years. This morning at the LME, aluminum’s 3 month delivery is seen trading at $1816, down by $11 from its previous close. We believe that this loss may have been temporary profit booking while, as the day progresses, we may remain on the higher side. Hence, we suggest buying the metal from the lower levels. Also, as long as the inventory continues to trade down, we may see the metals remaining on the buy side. Hence, we recommend buying from the lower levels.

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