Religare Recommends Buying MCX Aluminium Futures on Dips: Key Technicals and Fundamentals Explained

Swift Summary

• Aluminium Price Trends:

– Aluminium prices are ⁢climbing due to U.S. tariffs on Mexican imports,restricted Chinese production,and increasing European demand.
– MCX July Aluminium⁤ futures showed a positive bias at ₹253/kg, up ⁢by 0.06%.-⁢ On the Shanghai Futures Exchange, the most active contract gained 0.75% to reach ⁣¥20,900 ($2,913.26) per ton.
– Three-month⁤ LME contracts increased by 0.65%, trading at $2,646.50⁤ per ton.

• Key Factors Driving prices:

– ​The U.S. announced a 30% tariff on Mexican aluminium products ⁢effective from August 1, 2025.
– China’s‌ output is ⁣constrained⁢ due to an annual cap ⁣of⁢ 45 million tons, part of its carbon emission goals.
– European demand is rising as the EU increases defense goods production amidst sanctions on Russia.

• Technical Analysis & Trading Strategy:

– Technical charts show bullish patterns with aluminium prices making steady higher highs and maintaining support ​above ₹245 (MCX).
– ⁢Moving averages signal a shift towards bullish‌ momentum; traders are advised to adopt a “buy-on-dips”⁣ strategy around ₹250-251 with targets ⁤set at ‌₹262-264.

!Aluminium price trends technical chart

indian Opinion Analysis

The recent upward trend in aluminium pricing⁣ can considerably impact global trade dynamics and India’s place in it as both a producer and consumer ‌of base metals. With restricted chinese supply driving prices higher globally and new U.S.-imposed tariffs affecting ⁣North American ⁣trade structures, Indian ⁢industries may face dual challenges: ​rising input costs for domestic manufacturers reliant on imported materials and opportunities for exporters looking to leverage increasing European ⁤demand amid supply chain⁤ disruptions caused by geopolitical tensions (e.g., ⁢sanctions on Russia).

Domestically, ​India must balance these ⁤external pressures⁢ by bolstering its own strategic capabilities in aluminium production while addressing environmental concerns similar to China’s carbon restrictions strategy-highlighting regulatory reforms as critical for long-term competitiveness in commodities markets.

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