Fresh selling seen in aluminium, open interest up 4.38%

Aluminium settled down -0.25% at 101.25 as prices of major traded-metals tumbled to multi-year lows since last month as weak Chinese manufacturing data added to the brew of excess supply and a strong dollar that has put pressure on several commodities. China’s consumption of industrial metals fueled a more-than decade-long rally in prices after the turn of the century. But concern over the nation’s slowing economic growth has caused metals prices to start sliding over the last twelve months.

Data out already shows Japan’s preliminary GDP dropped 0.4 percent q/q, which was slightly better than the 0.5 percent fall expected, but it was the first quarter-on-quarter fall after two quarters of positive GDP. The GDP price index also rose less than expected. Data out later included the EU trade balance, the German Bundesbank’s monthly report and US data includes the Empire State manufacturing index, NAHB housing market index and TIC long- term purchases data. The base metals for the most part look weak and vulnerable as sentiment towards demand remains bearish. Funds on Comex continued to increase short exposure.

Technically market is under fresh selling and now aluminium is getting support at 100.6 and below same could see a test of 99.9 level, and resistance is now likely to be seen at 102, a move above could see prices testing 102.7.