Aluminium’s versatile applications across industries like automotive and construction make it a valuable commodity. Its market price fluctuates based on global economic conditions. Aluminium is traded with a base value quoted per 1 kg, with a standard trading unit of 5 M.T.
Introduction
Aluminium is a highly versatile and lightweight metal known for its exceptional malleability, low density, and excellent resistance to corrosion. Its unique properties make it essential across a wide range of industries, from automotive and aerospace to construction and packaging.
Aluminium's high conductivity makes it indispensable in electrical transmission lines, while its non-magnetic and non-sparking nature adds to its utility in specialised applications. As the most abundant non-ferrous metal, it plays a significant role in the global economy.
Aluminium is also 100% recyclable, making it a key material in sustainability efforts. Countries like China and India are major producers, with China accounting for over half of global production. Aluminium's ability to be easily cast, milled, and molded enhances its appeal for a wide variety of manufacturing processes.
Factors that Impact the Aluminium Price
Here are some key factors that impact aluminium market prices:
- Global Market Influence: Prices in international markets have a significant impact on aluminium rates, with fluctuations often tied to the global economy, currency exchange rates, and geopolitical events.
- Electricity Costs: Aluminium production is energy-intensive, requiring approximately 15,000 kWh of electricity per tonne. The cost of electricity, which can account for up to 45% of production costs in regions like China, directly influences aluminium prices.
- Industry Demands: The diverse use of aluminium across various sectors—construction, machinery, refrigeration, automotive, and aerospace—means that technological advancements in any of these areas could impact its price. As green energy initiatives grow, so does the demand for lightweight aluminium as a steel alternative.
- Substitution Risks: The transportation sector, particularly automotive and aerospace, heavily relies on aluminium. Advances in alternative, lighter materials could reduce aluminium demand, leading to lower prices. Similarly, the construction industry's demand fluctuations, especially in emerging markets, affect aluminium pricing.
- Global Economic Conditions: The global economy, including the strength of the U.S. dollar, economic slowdowns, and the growth of economies plays a crucial role in determining aluminium prices. Economic shifts can lead to significant supply and demand changes, affecting market rates.
Things to Consider Before Trading in Aluminium
Before diving into aluminium trading, it's essential to consider several key factors to ensure informed decision-making:
- Market Volatility: Aluminium prices are subject to fluctuations driven by factors such as global demand, geopolitical events, and currency exchange rates. Understanding these dynamics is essential for predicting price movements.
- Regulatory Environment: Government policies, including trade tariffs, environmental regulations, and subsidies, can significantly impact aluminium trading. Keeping informed about these regulations is crucial for anticipating market changes.
- Economic Indicators: Monitoring economic indicators such as industrial production, global economic growth, and infrastructure development is important, as these factors heavily influence aluminium demand and prices.
Aluminium Expiry Date Calendar 2024
Contract launch calendar for aluminium for the year 2024
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How to Trade in Aluminium via Angel One?
To trade aluminium via Angel One, follow these steps:
- Open a Demat and Trading Account: Start by opening a Demat and Trading Account with Angel One.
- Activate the Commodity Segment: Once your Demat account is set up for trading, make sure to activate the commodity segment to start trading in aluminium contracts and other commodities.
- Stay Informed: Monitor live aluminium prices, market movements, and news that could impact the market by following exchanges like MCX (Multi Commodity Exchange) and NCDEX (National Commodity and Derivatives Exchange).
- Execute Your Trades: Use the Angel One trading platform to place your trades according to your strategy.
- Implement Risk Management: Protect your trades by using risk management tools such as stop-loss orders to minimise potential losses.
