Commodity radar: Aluminium slips on Trump’s fresh tariff salvo. Opportunity to make up to 4% near-term gains. Here’s how

Aluminium prices on the MCX fell on Tuesday, taking cues from prices in London and Shanghai after US President Donald Trump’s fresh tariff salvo dented sentiments on the Street. The Trump administration on Friday brought more of the metal’s derivative products under the 50% import levy.

The MCX August aluminium contracts were trading at Rs 250.55 per kg, down by Rs 1.45 or 0.6%. The three-month expiry aluminium futures on the LME were trading at $2,588.50, down 0.71% while those on SHFE were hovering around CNY 20,565 per mt, lower by 0.22%.

The levies on the goods on the expanded list go into effect on August 18.

Commodity expert Ajit Mishra, who is Senior Vice President – Research at Religare Broking, said that the near-term upside is capped as the US has widened the scope of its 50% tariffs on steel and aluminium imports to include hundreds of additional products, which came into force Monday onwards.

Notwithstanding this, the market is getting support from a slower Chinese output this year as the production pace to be bound by the annual cap of 45 million tons, mandated to cap overcapacity and pollution limits, he said. This has coincided with higher demand in the EU as members invest in defence, Mishra said, adding that the supply for European factories is already limited due to sanctions against major producer Russia.

Tech view

Decoding the chart, the Religare analyst said that aluminium prices on the MCX are hovering in a relatively narrow range around Rs 256–250, with higher lows since the May low near Rs 228 and a gentle uptrend in place. The short-term moving average is above both the medium and long-term moving averages, signalling gradual bullish momentum, and the price currently faces resistance in the Rs 256 levels as observed by sideways action and slight pullbacks near those levels. On the downside, support lies around the Rs 248–249 zone.Aluminium Daily Chart

Expert trading strategy
Mishra recommends adopting a buy-on-dips approach between Rs 250–251 appears prudent, with a tight stop-loss below Rs 246 to mitigate risk. If the price breaks and sustains above Rs 254–255, expect a potential move toward Rs 258–260. Conversely, a decisive break below Rs 246 could open room for a deeper correction toward Rs 240.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)