Aluminium declined by 0.67% to close at Rs 306.2, influenced by apprehensions regarding decelerating global growth following the IMF’s caution that subdued domestic demand and a tenuous global environment present risks, especially for China. While China achieved its 5% growth target in 2025, ongoing deflationary pressures and a more severe property downturn than anticipated cast a shadow over the economic outlook. Sentiment was further dampened by reports indicating that the U.S. might reduce certain tariffs on steel and aluminium products.

Nonetheless, losses were constrained by the dynamics of tightening supply. South32 has announced that its Mozal smelter in Mozambique will transition into care and maintenance, whereas Chinese smelters are functioning near the government’s capacity limit. Concurrently, elevated U.S. tariffs have restricted imports and resulted in increased domestic prices.

Goldman Sachs has adjusted its first-half aluminium forecast upward to $3,150 per tonne, attributing this revision to diminished global inventories and robust demand. In China, refined aluminium production reached an unprecedented 3.87 million tonnes in December, culminating in a total output exceeding 45 million tonnes for the year. In the meantime, SHFE inventories experienced an increase of 21.3% in the previous week.

The market is currently experiencing long liquidation, evidenced by a 7.51% decline in open interest. Support is identified at Rs 304.5 and Rs 302.7, whereas resistance is positioned at Rs 308.8; a breach above this level may result in a challenge of Rs 311.3.