Aluminium prices exhibited a largely subdued performance, declining slightly by 0.12% to close at Rs 330.9, as a combination of mixed supply developments and demand concerns contributed to a range-bound market. On the supply side, output has increased in certain areas, with Alvance British Aluminium raising production at its Lochaber smelter by approximately 10%, bolstered by enhanced export prospects to the U.S. due to tariff adjustments. Concurrently, disturbances in the Middle East—exemplified by partial shutdowns at Aluminium Bahrain and diminished operations at Qatalum—have provided a degree of underlying support.

Nevertheless, the overall sentiment continues to exhibit caution. Increasing global inventories, currently exceeding 1.3 million tons—the highest level since 2020—underscore a robust supply, whereas sustained high prices and escalating energy costs persistently exert pressure on demand. This is apparent in China, where there has been a decrease in imports, despite a 3% increase in domestic production during the initial two months of the year.

Globally, aluminium production has also increased, reinforcing the supply-side pressure. In the physical market, premiums exhibit resilience, with European duty-paid premiums reaching $450 per ton, indicative of localized tightness. In the interim, apprehensions regarding Guinea’s potential implementation of bauxite export quotas have introduced a layer of uncertainty to the outlook for this raw material.

The market is currently experiencing long liquidation, evidenced by a 21.21% decrease in open interest. Aluminium is currently experiencing support at Rs 327.1, with a potential decline below this level suggesting a move towards Rs 323.1. Conversely, resistance levels are identified at Rs 334.2, followed by Rs 337.3.