August 18, 2023
(press release)
–
August 18
-- Aluminium yesterday settled down by -0.03% at 196.9 recovering from lows following support measures from China. China's commerce ministry demanded that
the United States
immediately lift the tariffs imposed on Chinese steel and aluminium imports. The discount on aluminium for near-term delivery compared with the three-month contract on the
London Metal Exchange
(LME) has reached its highest since the global financial crisis of 2008, indicating weak demand and rising supply.
The discount, or contango, for cash aluminium against the three-month contract, climbed to
$55.50
a metric tonne at Monday's market close for its highest level since
November 2008
. That compared to a premium, or backwardation, of
$40.50
at the end of May. The contango has persisted since early June when China's
Yunnan
province started ramping up energy-intensive aluminium production after the end of power curbs. Global primary aluminium output rose by 1.8% year on year in the first half of 2023, mainly owing to higher production in
China
, according to the
International Aluminium Institute
. In
July China's
output rose to near-record levels. Sentiment surrounding the construction sector has deteriorated further with the suspension of bond trading by
Country Garden
.
Technically market is under long liquidation as the market has witnessed a drop in open interest by -13.21% to settle at 3135 while prices are down -
0.05 rupees
, now Aluminium is getting support at 194.7 and below same could see a test of 192.4 levels, and resistance is now likely to be seen at 199.3, a move above could see prices testing 201.6.
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