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Mumbai, 14 Nov (Commoditiescontrol):The aluminum market experienced a downtrend across major global exchanges on November 13, impacted by the strengthening U.S. dollar, rising inflation, and investor caution fueled by uncertain Federal Reserve policies.
On the Multi Commodity Exchange (MCX), November aluminum futures closed at ₹236.05, down by ₹1.10, while December contracts declined by ₹1.40 to ₹236.30. Trading volumes remained low, with 1,807 lots traded and open interest dropping by 190 contracts, signaling short-term liquidation as traders minimize exposure.
In China, the Shanghai Futures Exchange (SHFE) saw sharper declines. December futures fell by 300 yuan to 20,820 yuan, and January 2025 contracts dropped by 280 yuan, settling at 20,835 yuan. The December contract witnessed high trading activity, with 140,791 lots, but open interest sharply decreased by 16,728 contracts, indicating profit-taking amidst recent price pressure.
On the London Metal Exchange (LME), the three-month aluminum forward slipped by $32.50 to $2,530.50, while the cash contract lost $32.83 to close at $2,495.33. LME’s price declines reflect weakened market sentiment, exacerbated by broader economic uncertainties and a U.S. dollar at its highest level this year.
In the U.S., the Consumer Price Index (CPI) for October rose by 2.6% year-over-year, meeting expectations and marking a three-month high after halting a six month decline. The CPI increase, coupled with a stronger dollar, has put downward pressure on base metals. Furthermore, recent Federal Reserve statements underscored uncertainty regarding rate cuts, with officials signaling caution that could result in a pause in the cycle. This tempered outlook from the Fed adds to market volatility as traders consider the impact of a robust dollar and inflation on commodity prices.
Aluminum stock values declined across all exchanges. MCX stock value dropped by ₹183.62 to ₹490.02, SHFE stock decreased by 428 yuan to 140,957 yuan, and LME stock levels fell by $2,600 to 724,100 tons, underscoring reduced inventory support across the board.
China’s recent real estate incentives, including deed tax discounts and VAT exemptions, aim to stimulate a sector crucial to aluminum demand. However, aluminum ingot inventories remain low, holding below 600,000 mt. Improved transportation in northwest China has eased the ongoing destocking trend, with a slight rebound in inventories forming. Tight alumina spot supply and recent production disruptions continue to elevate costs, though remarks from the Nonferrous Metals Association on alumina’s volatility have eased sentiment, stabilizing prices at high levels.
Outlook and Technical Levels
On the MCX, aluminum is expected to remain under pressure in the short term, closing at ₹236.05, with support levels at ₹233.3 and ₹234.7, and resistance at ₹237.6 and ₹239.1. The pivot level is set at ₹236.2, with a reversal point at ₹240.3. An RSI reading of 44 suggests mild bearishness, with potential for consolidation. Near-term price direction will likely be influenced by evolving macroeconomic conditions, including updates on Fed policy and alumina price movements globally.
(By Commoditiescontrol Bureau: 09820130172)
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