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Mumbai, 04 Dec (Commoditiescontrol): The aluminum market presented a mixed performance across major global exchanges on Tuesday, reflecting diverse trading dynamics influenced by geopolitical tensions, macroeconomic signals, and fundamental market trends.
MCX (Multi Commodity Exchange)
The December 2024 aluminum contract closed at ₹243.80, up ₹1.15, with robust trading activity of 2,310 lots. Open interest increased by 46 lots, signaling heightened participation as the contract nears expiry. The January 2025 contract also gained ₹0.70 to settle at ₹243.05, with a moderate volume of 351 lots.
SHFE (Shanghai Futures Exchange)
The December 2024 contract declined by ¥20.00, closing at ¥20,360, with a trading volume of 10,835 lots. Open interest dropped by 4,105 lots, suggesting profit booking or position liquidations. Meanwhile, the January 2025 contract recorded a slight loss of ¥5.00, ending at ¥20,380. Despite a significant trading volume of 102,614 lots, open interest decreased by 3,962 lots.
LME (London Metal Exchange)
The three-month forward contract advanced by $19.50 to close at $2,609.50, indicating resilience in global aluminum markets. The cash contract rose $18.85 to settle at $2,584.60, narrowing the cash-to-three-month spread to $25, reflecting tightening near-term supply.
Inventory levels across key exchanges continued to decline, underscoring steady consumption and seasonal trends. On MCX, stocks fell by 19.20 metric tons as of December 2, with no inventory reported. SHFE stocks dropped by 4,623 metric tons to 103,029 metric tons, indicating robust downstream demand or supply disruptions. LME inventory levels declined by 2,775 metric tons to 690,700 metric tons, maintaining the trend of reduced stocks amid steady consumption.
Geopolitical tensions in South Korea, the Middle East, and the Russia-Ukraine region have reignited risk aversion in global markets. In the U.S., expectations of a December interest rate cut by the Federal Reserve buoyed sentiment across non-ferrous metals, providing a modest lift to prices. Domestically, India’s manufacturing PMI remained above the 50-point mark in November, signaling economic expansion, though trade war risks continue to cast a shadow.
In China high aluminum production costs are putting pressure on high-cost smelters, with concerns about potential production cuts. However, the seasonal slowdown has softened downstream demand, leading to weaker performance in the spot market. Inventory movements remain a focal point, as easing shipping backlogs in Xinjiang have led to fluctuating aluminum ingot supplies. While low inventory levels provide short-term price support, concentrated arrivals could weigh on prices in the coming weeks.The cancellation of export tax rebates on aluminum semis in December is expected to dampen mid-term demand, posing additional challenges for the market.
Aluminum prices are expected to trade within a range in the short term, supported by high production costs and low inventory levels. However, weak seasonal chinies demand and potential inventory pressures could limit upside potential. Market participants are advised to remain cautious amid evolving geopolitical and macroeconomic conditions.
(By Commoditiescontrol Bureau: 09820130172)
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