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 "Commodity Article on Aluminium" by Mr. Saish Sandeep Sawant Dessai, Research Associate- Base Metals, Angel One Ltd

On the LME, aluminum prices gained over 4 percent and over 2 percent on the MCX. The high-power prices in China and most European nations have been major tailwinds for the price rise., as the manufacturing of aluminum is a power-intensive process and increasing power prices may have an adverse effect on the total production of the light metal.

In reaction to the escalating energy crisis and frequent strikes, numerous aluminum smelters in China and other areas of Europe have either ceased production or reduced output by 50 percent, raising market fears about future supply. However, energy supply pressure in Sichuan province has decreased as the local weather has cooled following the region's worst heatwave in 60 years, which would have likely raised industrial electricity demand. Following in the footsteps of a few other aluminum smelters that have ceased production due to increased energy prices, the newest smelter to join the list was Speria's German smelter, where the company has cut production by half..

Following Fed Chair Powell's hawkish remarks on Friday, the market is expecting a 75-basis point rise in interest rates at the US Fed's September meeting, pushing the US dollar index to two-decade highs and capping the upside in metals.

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