NEW DELHI: Aluminium futures witnessed a decline on Tuesday, slipping by Re 1 to Rs 257.20 per kilogram, as market participants reduced their positions amid weak demand in the spot market. The drop reflects broader trends in the industrial metals sector, where slowing consumption and global economic uncertainties continue to weigh on prices.
On the Multi Commodity Exchange (MCX), aluminium contracts for March delivery fell by Re 1, or 0.39%, to Rs 257.20 per kg, with a trading volume of 944 lots. Analysts attributed the decline to reduced demand from key consuming industries, including automotive and construction, which have been grappling with supply chain disruptions and inflationary pressures.
Market Analysis and Industry Trends
The aluminium market has been under pressure due to a combination of factors, including sluggish industrial activity and a global economic slowdown. China, the world’s largest consumer of aluminium, has reported weaker-than-expected industrial output, further dampening sentiment. Additionally, rising energy costs and environmental regulations have increased production expenses, squeezing profit margins for manufacturers.
In India, the domestic aluminium industry is also facing challenges from cheaper imports and fluctuating raw material costs. Despite government initiatives to boost infrastructure and manufacturing, demand for aluminium remains subdued, impacting futures prices.
Expert Insights
Market experts suggest that the current downtrend in aluminium prices may persist in the short term unless there is a significant rebound in industrial demand. “The easing of demand from key sectors, coupled with global economic headwinds, is likely to keep aluminium prices under pressure,” said a commodity analyst.
However, some analysts remain optimistic about a potential recovery in the medium to long term, citing government infrastructure projects and the transition to green energy as key drivers for future demand.
Conclusion
While aluminium futures face near-term challenges, the market outlook remains cautiously optimistic. Investors and industry stakeholders will closely monitor global economic trends and domestic demand recovery to gauge the metal’s future trajectory.
Source: Web Team, C6N
