Aluminium grew at 0.52% to Rs. 328.25, which was due to the US dollar weakness, as unforeseen Democratic wins in US midterm elections made pressure on the dollar
Further support came from the decreasing of the Global Inventories, which fell to a consumption of about 44 days, which is the lowest level in recent years and shows strong demand
The Aluminum Inventory monitored by the Shanghai Futures Exchange also reduced 10.3% compared to the previous week
However, these booms were limited by potential global supply reforms in 2027 and the anticipation of the sirplus in the market. Retrieval of production in the Middle East, stable output of China and increasing capacity of Indonesia can reduce the barriers of supply. The production loss of the Middle East has been reduced by 2 million tonnes now by reducing the estimated 3–3.5 million tonnes. Emirates Global Aluminum has re-turned 631 reduction cells out of 1,262 in its Al-Travilla Smelter, thereby returning 50% of the capacity and the entire production is expected in the first quarter of 2027. At the same time, China’s primary aluminum production reached a record of 11.84 million tonnes in July-September, which increases the year-to-year 2.2%. Production in September 3.91 million tonnes (3.1% increase) and 35.03 million tonnes (3.8% increase) in the first nine months. The International Aluminum Institute pointed out that the global primary aluminum production in September stood at 6.014 million tonnes, reduced by 6.10 million tonnes of the previous year, showing continuous weakness in global production. Nevertheless, China’s high smelting margins and high operating rates are supporting production growth, thereby increasing supply pressure in the future. On the other hand, the slow restart process of the Middle East closed smelters can limit the speed of supply recovery due to the Alumina import cost increases
Technically, short coverings are being seen in the market, as Open Interest 6.09% fell to 4,022 contracts, while prices increased to Rs. 1.70, making it clear that recovery is mainly from covering existing short positions. Aluminum is getting support at a level of Rs. 325; If prices fall below it, Rs. 322 can be tested, while resistance is set at Rs. 330.50. If this level is continuously broken, the upward direction is likely to rise to Rs. 333.00
Conclusions for Aluminium Traders:
The decline in the dollar after the Democratic win and the global inventory reduction has supported the aluminum, but the potential supply of the Middle East and China may continue to be sustained in prices, considering the potential surprise of 2027. Short-term bullish momentum may continue due to short coverings, yet the uncertainties of the supply side cannot be ignored. Traders should pay attention to the support level of Rs. 325 and resistance level of Rs. 330.50