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ALUMINIUM

Global Aluminium futures traded mixed to bearish during the month of June, owing to demand worries in China due to higher prices, relations with United States as the Sino-US trade talks do not make any major progress. Covid-19 worries continue to loom in the European and South American countries that had added uncertainties regarding the health of the global economy with rising covid19 cases in Japan. MCX Alumini futures has closed at Rs.194.3/kg by 27th May, lower by 1.17% compared to Rs.196.6/kg as on 31st May.

Looking forward for the coming month, we expect International Aluminium Futures to trade bullish as the covid vaccination process has picked up face. Currently, the Chinese and United States economic data has shown further incline over the months and expected to be higher for the month of June, which is forecasted to support higher Aluminium production due to rising demand. But then, extreme bullishness Is likely to capped as US Dollar Index and Bond Yield remainin the after FED reported that they are likely to increase the interest rates two times by the end of the year 2023. As per International Aluminium Institute, global Aluminium production for the month of May’21 has been reported to be around 5.744 Million tonnes, higher compared to previous month's production of 5.433 million tonnes. China has witnessed higher global production for the last month. China's Aluminium production for the above month has been estimated around 3.334 million tonnes, lower compared to 3.216 million tonnes reported during the previous month. Elsewhere, production in Asia (excluding China), North America, Western and Eastern Europe have also reported higher production for the May'21 compared to the proceeding month. Overall, we expecta bullish trend in MCX Alumini Futures for the month ahead,

On a daily chart, MCX Aluminium (July) future has been rising continuously in a bullish channel with Higher Highs and Higher Lows formation from the last couple of weeks. The price has reversed from the lower band of trend line and settled above the 50 Exponential Moving Averages, which is also supportive of the bullish momentum. In addition, the price has been taking support of Ichimoku cloud, which confirms bullish momentum in the near future. Moreover, an oscillator Stochastic RSI is also supportive for the long position with positive crossover, Hence, based on the abovementioned technical structure, one can initiate a long position in MCX Aluminium (July) future at CMP 194.10 or a fall in the price till 191.50 levels can be used as a buying opportunity for the upside target of 206. However, the bullish view will be negated if MCX Aluminium (July) future closes below the support level of 187.

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