DBT Bureau
Pune, 12 Dec 2025
Aluminium futures gained 1.41% to settle at ₹280.7, supported by sharply higher Japanese import premiums for Q1 2026 at $190–$203 per ton, a notable 121%–136% jump from the current quarter. Market sentiment also improved on expectations of additional stimulus measures in China, the world’s top metals consumer. LME warehouse data indicated a shift in stock composition, with Russian-origin aluminium rising to 53% of available inventories, while Indian-origin material held steady at 40%. Fundamental cues remained mixed. Concerns about Chinese demand persisted, yet the downside was tempered by structural supply constraints as smelters near state-imposed capacity ceilings, limiting production expansion. International Aluminium Institute data showed global primary aluminium output rising only 0.6% year-on-year in October to 6.294 million tonnes, indicating subdued supply growth. Additional supply pressures emerged from operational disruptions, including potline suspension at Iceland’s Grundartangi smelter and Alcoa’s decision to shut its Kwinana refinery in Australia. Japanese port stocks declined 3.6% month-on-month to 329,100 tonnes, adding to the tightening narrative. Trade data showed strong Chinese activity: October imports of unwrought aluminium and aluminium products rose 10.4% year-on-year to 350,000 tonnes, following a hefty September surge. Technically, the market is in fresh buying territory, evidenced by a 6.38% rise in open interest to 3,117 alongside a 3.9-rupee price increase. Support is placed at ₹278, with further downside risk toward ₹275.2 if breached. Resistance stands at ₹282.5, and a breakout above this level could open a move toward ₹284.2.
Market Analysis:
- Aluminium trading range for the day is ₹275.2- ₹284.2.
- Aluminium rose as producers sought sharply higher Japan Q1 premiums of $190–$203 per ton.
- Support also seen amid concerns that Chinese smelters are nearing government-imposed capacity limits, constraining supply.
- Global primary aluminium output in October rose 0.6% year on year to 6.294 million tonnes – IAI
Silver surged 5.41% to ₹198942, marking a fresh record high as the global market tightened sharply amid deepening supply deficits and plunging inventories. London silver stocks have fallen to their lowest levels since 2025, reflecting rapid drawdowns and heightened physical market stress. China’s announcement of strict silver export controls for 2026 has further accelerated demand as fabricators scramble to secure material ahead of restrictions. Structural supply constraints persist, with mine production and recycling essentially flat for more than a decade, while industrial demand—driven by solar PV, electronics, EV components, and battery technologies—continues to escalate. The global deficit is projected to widen to nearly 125 million ounces in 2025, marking the fifth straight year of shortage and bringing the cumulative gap since 2021 to close to 800 million ounces. The Federal Reserve’s latest 25 bps cut to the 3.50%–3.75% range maintained an accommodative stance, though Chair Jerome Powell signaled that the threshold for future rate cuts remains high. Simultaneously, liquidity concerns increased as Chinese inventories hit decade lows and exports surged to a record 660 tons in October. Despite a recent 3.5% rise in LBMA silver inventories to 27,187 tonnes, borrowing costs in London remain elevated. Technically, the market is in fresh buying territory, with open interest up 2.07% to 12532 while prices jumped 10207 rupees. Support stands at ₹192830, with deeper downside toward ₹186715, while resistance is seen at ₹202140, above which prices may target ₹205335.
Market Analysis:
- Silver trading range for the day is ₹186715- ₹205335.
- Silver notched record high of ₹197000 amid concerns over a market deficit.
- Fed Chairman Jerome Powell said that the bar for further interest rate cuts is very high.
- Fed keeps the door open for further monetary easing after reducing interest rates by 25 bps to 3.50%-3.75%.
