Aluminium yesterday settled up by 0.17% at 208.55 as domestic aluminium ingot social inventory fell rapidly as downstream consumption continued to pick up. On the fundamentals, the resumption of production by aluminium smelters in Sichuan, Guizhou, and other places has led to a slight recovery on the supply side. The aluminium ingot social inventories across China’s eight major markets stood at 1.13 million mt as of March 23, down 85,000 mt from a week ago and 47,000 mt from Monday, March 20. The figure, albeit up 85,000 mt from the same period last year, has fallen 143,000 mt from the peak recorded in early March.
Stocks across three major markets dropped sharply, led by south China, where fewer cargoes arrived following output cuts by smelters earlier while demand recovered. After two weeks of accumulation, the domestic aluminium billet social inventory dipped 1,500 mt from a week ago to 167,900 mt as of March 23. Stable aluminium billet production ensured smooth arrivals. The imports of unwrought aluminium alloy stood at 81,000 mt in January 2023, down 30.5% year-on-year and 12.3% month-on-month, according to the General Administration of Customs. Aluminium stocks at three major Japanese ports fell by 2.6% to 382,400 tonnes at the end of February from 392,500 tonnes at the end of January.
Technically market is under short covering as the market has witnessed a drop in open interest by -1.08% to settle at 3010 while prices are up 0.35 rupees, now Aluminium is getting support at 208 and below the same and could see a test of 207.3 levels, and resistance is now likely to be seen at 209.2, a move above could see prices testing 209.7.
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