MCX Aluminium slipped last week, after testing a fresh all time high - Geojit Financial
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ALUMINIUM
Prices retreated after testing an all-time high on domestic futures platform last week. Tight supply due to China’s push to cut carbon emissions and low LME inventories support the sentiment.
* Aluminium giant China Hongqiao plan to move more smelting capacity from its base in industrial Shandong to the hydropower -rich province to Yunnan
MCX Aluminium slipped last week, after testing a fresh all time high.
Aluminium prices ticked lower after scaling new highs along with peers as rising inflation fears and a dip in demand from China. While worries that china may curb output to meet its carbon emission targets also influenced the price sentiments.
Shanghai aluminium shed the most compared to other major markets by more than 3.00 percent and closed at CNY 19450 per metric tonne. In MCX platform, most active futures prices shed by 2.38 percent last week and closed at Rs.194.15 per kilogram.
China Hongqiao Group the world's top private sector aluminium producer
plans to move more smelting capacity from its base in industrial Shandong to the hydropower-rich province of Yunnan. Meanwhile, Hongqiao committed in 2019 to moving around 2 million tonnes of annual capacity from Shandong in eastern China to Yunnan's Wenshan prefecture in the southwest to allow easier access to a cleaner power source than coal for the energy-intensive aluminium smelting process.
Aluminium Association of India (AAI)
demanded at least 5 percent remission for the sector under the tax refund scheme to safeguard its competitiveness in global markets and also requested to government to consider a separate budget allocation for the aluminum industry.
Warehouse stock level
The aluminium inventory levels in LME registered warehouses decreased last week by 27200 Mt and totalled 1762525 MT. The inventory level in SHFE registered warehouses increased last week and totalled at 341097 MT.
Outlook
LME: : Broad outlook remain on the positive side as long as prices hold the support of $2300. An unexpected drop below the same is an early sign of reversal of the current momentum.
MCX May: If the support of 160 remain hold the downside, expect rallies to continue in the counter. Major downside reversal is seen if it breaks 158.
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