Rising demand and tightening supply boosts aluminium

Aluminium settled up 0.31% at 129.30 with the rise in demand and decline in the growth of supply. The demand growth in the domestic market would definitely considerably affect the export of aluminum to foreign lands. According to the forecast the domestic demand for aluminum from China will increase at least a 10 percent under the period 2014-2015, which would increase the global demand caused by the acute export of the commodity, and create a tight supply demand position hiking up the price.

The State Council announced Wednesday to encourage private investment in key sectors of the economy to boost investment efficiency and fill the gap in supply of urban facilities, infrastructure, educational opportunities, health care and ageing services. By doing this, the Chinese government desired to guide private capital to help accelerate infrastructure construction, boding well for base metals. Technically market is under short covering as market has witnessed drop in open interest by -13.54% to settled at 6308 while prices up 0.4 rupee, now Aluminium is getting support at 128.7 and below same could see a test of 128 level, and resistance is now likely to be seen at 130.1, a move above could see prices testing 130.8.

Trading Ideas:
--Aluminium trading range for the day is 128-130.8.
--Aluminium prices ended with gains as support seen on concern about shortages.
--Prices also seen supported on expectations for tight aluminum supply outside China.
--Base metals prices followed their own trends overnight due to mixed macroeconomic indicators.

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