Aluminium market rises on short covering, open interest drops 4.88%

Aluminium prices settled flat as prices recovered from lows despite of concerns over faltering Chinese demand and the dollar traded at its strongest in more than a decade. Russian aluminium giant Rusal plans to decide in mid-December which aluminium smelters to suspend as a part of its plans to potentially cut up to 200,000 tonnes of production. Rusal, the world's top aluminium producer, is looking to cut production, under pressure from sliding prices due to a market surplus. Rusal has trimmed its forecast for global aluminium demand growth in 2015 to 5.6 percent and raised its forecast for a global aluminium surplus this year by a third to 373,000 tonnes.

Aluminium stocks held at three major Japanese ports stood at 433,700 tonnes at the end of October, down 8.3 percent from a month earlier, trading house Marubeni Corp said. Surcharges for physical aluminium in Europe levelled off after recent gains and may come under pressure from additional supply if Chinese exports rebound and some inventories are liquidated. The surcharges, or premiums, which consumers pay on top of the London Metal Exchange (LME) cash price for immediate delivery of metal, have gradually climbed over the past couple of months amid tighter availability.

The number of housing starts issued in the U.S. tumbled in October, while building permits rose more than forecast, painting a mixed picture of the U.S. housing sector, official data showed. Technically market is under long liquidation as market has witnessed drop in open interest by -4.88% to settled at 5262 while prices remain unchange0 rupee, now Aluminium is getting support at 96.3 and below same could see a test of 95.5 level, and resistance is now likely to be seen at 97.8, a move above could see prices testing 98.5.