Aluminium seen firm till June on China buys

Global aluminium prices are likely to stay upbeat till June on expectation of increase in demand following China State Reserve Bureau's aggressive purchase plan of the metal and a new economic stimulus plan from the country, analysts said.

However, prices could slump after June on surplus output and high inventories amid weak demand from key sectors like automobiles.

In the late afternoon trade, aluminium three-month futures on LME were at $1,367 per tonne, up $16 from Wednesday's close.

The contract may get support at $1,280 and face resistance at $1,600 in the next three months, while the metal is seen trading in the broad range of $1,100 and $1,750 this year, analysts said.

"There are rumours China's new fiscal stimulus plan is likely to be two-three times more than the current approved $585 bln to revive growth after exports collapsed and economy grew at its slowest pace in seven years," said Somnath Dey, research head - metals and energy, Religare Commodities.

Concurrently, China SRB has already started accumulating aluminium from domestic and international producers to build a reserve of 800,000 tonne-1 million tonne in order to take advantage of current low prices and support local smelters, analysts said.

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