Aluminium prices experienced a modest decline of 0.25%, concluding at Rs 354.85, influenced by increasing inventories in China that dampened market sentiment. Stocks in Shanghai Futures Exchange warehouses have been on a consistent upward trajectory, approaching levels not seen in nearly six years. This trend indicates a decline in demand and a more measured approach to purchasing in light of recent price fluctuations. Concurrently, the global supply landscape presents a varied outlook.

On one hand, short-term tightness is evident, with cash premiums surging to multi-year highs and warehouse inventories declining, indicating strong demand for immediate delivery. Supply concerns have intensified following disruptions at Emirates Global Aluminium, where the complete restoration of its Al Taweelah smelter may require up to a year due to recent damage.

Nevertheless, this constriction is being counterbalanced by an expansion in overall supply. China has significantly increased its production levels, while global output is experiencing a modest rise. Simultaneously, elevated overall inventory levels coupled with prudent consumer purchasing behavior are constraining upward momentum. Additional factors, including operational changes at global smelters and varying import trends, are contributing to the complexity of the outlook.

From a technical perspective, the market is experiencing long liquidation, as evidenced by the decline in open interest in conjunction with falling prices. Immediate support is observed at Rs 352.5, with additional downside potential towards Rs 350. On the upside, resistance is positioned at Rs 358.2, and a movement above this threshold could propel prices towards Rs 361.4.