Aluminium market rises on short covering, open interest drops 6.06%

Aluminium settled flat as the US offered a mixed bag of economic data. US inflation data were basically in line with market expectations, but the Conference Board’s Leading Economic Index missed forecasts. Michigan University’s consumer confidence index was positive. Meanwhile, production of primary aluminium reached a record 2.56 million tonnes in March, up from the previous high of 2.18 million tonnes hit in December 2014. Output rose 8 percent year-on-year. In the first quarter, aluminium production climbed 7.5 percent on-year to 7.51 million tonnes.

China Merchants Futures has estimated China will add 4.3 million tonnes of annual aluminium capacity this year, with the bulk in the first and fourth quarters. German Finance Minister Wolfgang Schaeuble refused further concessions to Greece, while the International Monetary Fund ruled out giving the country any leeway on 1 billion euros debt repayments due by early May. Greece is in imminent danger of defaulting if bailout aid fund from international creditors are not made available, even as discussions over an extension remained inconclusive. In economic news, a Labor Department report showed a modest increase in U.S. consumer prices in March, but were slightly less than economists' expectations.

A Conference Board report showed its index of leading U.S. economic indicators for March continued to increase, but less than expected. Nevertheless, consumer sentiment in the U.S. improved more than expected in April, a report from the University of Michigan showed. Technically market is under short covering as market has witnessed drop in open interest by -6.06% to settled at 3317 while prices up 0.15 rupee, now Aluminium is getting support at 113.8 and below same could see a test of 113.1 level, and resistance is now likely to be seen at 115.3, a move above could see prices testing 116.1.