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Aluminum May Trade With A Slight Positive Note

ByCommodityOnline
Published 03/11/2014, 04:42 AM
Updated 05/14/2017, 06:45 AM



-- Aluminum’s 3 month forward prices at the LME closed higher in yesterday’s trading session at $1775.50, in line with yesterday’s view where we suggested that the metal might initially trade down and may recover by the end of the day. Likewise, prices at the MCX platform prices rose slightly by 0.20% and settled at Rs 06.90.

--The recovery in prices can be attributed to the fact that aluminum inventories have declined in sixteen out of seventeen trading sessions and its cancelled warrants have also been increasing during the same period. Cancelled warrants increased from 2,469,875 MT to 2,496,500 MT in the last seventeen trading sessions, which is protecting the commodity from a sharp fall compared to its peers. Meanwhile, prices have reached a level which is preventing miners from getting optimum profit and therefore, every time prices reach a low, they recover smartly immediately. We believe that a similar situation took place in yesterday’s trading session.

--This morning, Aluminium prices at LME are seen trading at $1775, unchanged from the previous close. We believe that the prices may rebound in today’s trading session. We believe that the Asian markets trading marginally higher this morning may support trade in the commodity. However, gains could be limited. At the MCX, aluminum prices rose slightly but, the volumes were mostly higher while the open interests remained steady. This indicates that prices may rise moderately in today’s trading session. We are not carrying any recommendations today, though we believe that if the commodity ends on a positive note, prices may gradually turn higher.

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