Aluminium prices experienced an upward movement, concluding at Rs 349.95, reflecting a 1.54% increase, as market participants responded to escalating worries regarding possible supply interruptions originating from the Middle East. The current conflict in the region has heightened concerns regarding the transportation of shipments via the Strait of Hormuz, a crucial corridor for aluminium and its raw materials, including alumina.

Producers in the Middle East represent approximately 9% of the global aluminium supply, making any disruption in the region a focal point of market attention. Some relief emerged following Norsk Hydro’s confirmation that its Qatalum smelter in Qatar would reverse the previously announced production curtailment and maintain operations at approximately 60% capacity, notwithstanding diminished gas supplies and persistent logistical challenges.

Meanwhile, robust price increases on the London Metal Exchange have driven the Shanghai Futures Exchange premium to its highest level since April 2022, potentially incentivizing further Chinese exports and contributing to a more balanced global supply. In a development that exacerbates supply concerns, Qatalum and Aluminium Bahrain have invoked force majeure on their shipments. Meanwhile, South32 has announced that its Mozal aluminium plant in Mozambique will transition into care and maintenance mode.

From a technical perspective, the market is experiencing short covering, as open interest decreased by 0.58% to 3,231 lots, while prices increased by Rs 5.3. Immediate support is identified around Rs 346.6, and a decline beneath this threshold may drive prices down to Rs 343.2. On the upside, resistance is likely around Rs 352.7, and a sustained move above this level may lead to a test of Rs 355.4.