Aluminium concluded the day with a 1.51% increase, reaching Rs 272.2, buoyed by rising anticipations of a U.S. Federal Reserve rate reduction in December following the dovish remarks from central bank representatives. This change in sentiment enhanced risk appetite throughout the metals sector. Prices received additional support from apprehensions regarding Chinese smelters nearing government-mandated capacity limits, which could constrain supply outlooks.

In October, global primary aluminium production increased by 0.6% year-on-year, reaching 6.294 million tonnes, as reported by the International Aluminium Institute. However, this figure represents a 9% decline compared to the output levels observed in September. In contrast, aluminium inventories at the Shanghai Futures Exchange increased by 7.67% since last Friday, indicating mixed signals in supply and demand dynamics. Global supply risks continue to be heightened as a result of operational challenges at key facilities: the suspension of potlines at Iceland’s Grundartangi smelter, Alcoa’s choice to close its Kwinana alumina refinery in Australia, and substantial reductions in output at Century Aluminium’s Iceland smelter due to electrical failures.

In October, China’s imports of unwrought aluminium and aluminium products experienced a year-on-year increase of 10.4%, totaling 350,000 tons, thereby sustaining the robust momentum observed previously. Year-to-date imports have reached 3.36 million tons, reflecting a 6.1% increase, indicative of strong consumption trends in the transportation, construction, and packaging sectors.

Aluminium experienced renewed buying activity, as evidenced by a 13.63% increase in open interest to 3,384, alongside a price increase of Rs 4.05. Support is positioned at Rs 269.5, with additional downside potential toward Rs 266.8. Resistance is positioned at Rs 273.7, and a breakout may propel prices towards Rs 275.2.