Aluminium inventories on LME showed marginal correction in last one month. The inventories stood at 4288750 tonnes, down 0.33% on 1 Dec 2010 as against 4303075 tonnes on 1 Nov 2010. During the same period prices of three month forward Aluminium contract declined by 3.7%. The basis of decline was the rise of Dollar and the tensions in Korea.
For the coming days triggers for Aluminium will be provided by amount of volatility in the inventory levels. Aluminium inventories are still quite high although the demand has improved in various automobile segments.
Though the decline was seen in overall world inventories as per International Aluminium Association. The total Aluminium inventories in the world during October was 2447000 tonnes, up 3.1% from 2373000 tonnes on September 2010.
The rise was contributed by higher inventories in Europe, Asia and North America. The inventories in Asia were 390000 tonnes in October, up 4%. In Europe the inventories stood at 1113000 tonnes during October, up 8.6% from 1025000 tonnes in September.
Today, the prices are finding some buying from the lower levels on easing market worries on debt and increase of manufacturing activity across globe. Most active benchmark contract on MCX is trading at Rs. 107.4 per kg, up 0.37%. The markets will be eyeing its Resistance of Rs. 108 as the day progresses.
For the coming days one should keep a close eye on the inventories movement. The drive for China to reduce the industrial emissions has already led to closure of many energy intensive units including Aluminium producers but the inventories levels are expected to take time to be gobbled by the real demand.
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