Thursday 14 March 2013

Limited Momentum In Aluminium On MCX

Aluminium...
MCX Aluminium is witnessing limited momentum in trades in early morning hours. The prices have not been able to find a way out of the consolidation that has rolled it in range of Rs 108 and 104 per kg since late February. Metal is always a bit less volatile compared to Copper but the rapid downfall in prices from Rs 116 per kg levels in mid February has sapped further energy to trade down. The market situation is such that even the buyers are missing from the contract.
LME three month Copper forwards was trading at $ 1965 per tonne, down by $ 23 per tonne from last night. On MCX, Aluminium April was trading at Rs 105.65 per kg on Thursday. The prices are static in last few trading sessions.
Going forward, there is news in the markets that China is going to stock further 300000 tonnes Aluminium in order to give support to the industry. What will be the implications of such move on Aluminium?
1. Brief rally can occur on the day of announcement and few more sessions.
2. Prices will come back down as bears will take opportunity to sell on rallies.
3. Inventories already at high levels.
4. Premiums charged on forwards are coming down due to curb in financing deals.
5. Western China already producing high amount of Aluminium.
6. Total Aluminium production of China was up by 11% to 1.73 million tonnes in February 2013.
Source by Commodity Insights

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