Aluminium prices exhibited an upward movement, concluding with a gain of 1.01% at Rs 314.85, bolstered by favorable macroeconomic indicators from China and constricting global supply dynamics. In January 2026, China’s manufacturing PMI increased to 50.3, marking the most rapid expansion in three months. This growth was propelled by enhanced output and new orders, notably from Southeast Asia. Sentiment was further bolstered by accommodating monetary policy, as the PBOC permitted the one-year MLF rate to decline to an unprecedented low of 1.5% and reaffirmed its dedication to maintaining ample liquidity through rate reductions and RRR cuts in 2026.

Disruptions at key aluminium smelters in Iceland, Mozambique, and Australia have constrained near-term availability on the supply side. Goldman Sachs has adjusted its first-half aluminium price forecast to $3,150 per tonne, attributing this revision to low inventories, power limitations affecting new smelters in Indonesia, and strong demand stemming from electric vehicles and power grids. Investor optimism is indicative of initial signs of economic stabilization, a development attributed to Beijing’s targeted support measures.

In December, global primary aluminium production experienced a slight increase, while inventory levels exhibited varied trends. Notably, SHFE stocks rose by more than 10% week-on-week, and Japanese port inventories also saw a modest uptick. China’s refined aluminium production sustained robust performance at unprecedented levels, coupled with an increase in imports of unwrought aluminium.

From a technical perspective, the market is experiencing new buying activity, as evidenced by a 1.84% increase in open interest. Aluminium exhibits support at Rs 310.9; a decline beneath this level may lead prices to test Rs 307. Conversely, resistance is identified at Rs 318.3, with a potential breakout that could propel prices toward Rs 321.8.