Aluminium dropped as investors cautiously awaited key economic data

faced a 0.82% decline, closing at 200.15, driven by cautious investor sentiment awaiting crucial economic data. A surprising expansion in Chinese manufacturing in November contradicted earlier official reports, influencing market dynamics. Moody’s maintained China’s credit rating at A1 but shifted the outlook to “negative,” citing risks from sustained lower economic growth and ongoing property sector restructuring. 

The Caixin China General Service PMI for November hit 51.5, marking the 11th consecutive month of growth and the fastest expansion since August. Strong market conditions were reported, with new orders growing significantly, indicating improved domestic and overseas demand. Global primary aluminium output in October rose 3.9% YoY to 6.116 million tonnes, according to the International Aluminium Institute. Chinese data revealed a substantial increase in primary aluminium imports, up 173% YoY in January-October, leading to a 347.33% YoY surge in net imports. October saw a 221.19% YoY rise in imports and a 91.29% MoM decline in exports, resulting in a 223.4% YoY increase in net imports. 

Technically, the market experienced long liquidation, with open interest remaining unchanged at 4179, coupled with a 0% change. Prices dropped by -1.65 rupees. Support for Aluminium is identified at 199.4, potentially testing 198.7 levels. On the upside, resistance is anticipated at 201.2, with a breakout possibly leading to a test of 202.3.