Long-term prospects for aluminum suggest an increase in demand.
Thus, Indian aluminum products will be more widely represented in the U.S. market. This was announced last week by the Indian Ministry of Commerce and Industry. According to the trade deal, the U.S. Commerce Department will approve about 80% of applications for aluminum exports and 70% for steel exports made in India.
Since June 2018, the U.S. has restricted market access for Indian products. Both sides imposed additional tariffs and duties on the purchase of a number of products. Now these measures will be lifted as Indian Prime Minister Narendra Modi and U.S. President Joe Biden managed to reach an agreement.
According to Indian Minister of Commerce and Industry Piyush Goyal, the new agreement between the countries will boost India's aluminum and steel exports. It may increase by about 35%.
Meanwhile, European Union countries led by France and Germany intend to classify aluminum as a critical raw material. The EU expects to ease the procedure for obtaining official permits for aluminum production and to increase funding for the industry.
According to a report published by the Financial Times, a proposed amendment to the EU's Critical Raw Materials Act proposes to include bauxite, aluminum and other aluminum raw materials in this list. These materials are essential to the energy and digital transition.
As a result, approval periods for bauxite mining and aluminum production will be reduced to 24 months, and to 12 months for aluminum processing. It is worth noting that allied countries are heavily dependent on bauxite imports.
Increased supply of Indian aluminum in the U.S. market and the EU actions have caused a decline in the price of the metal.
The aluminum price is heading towards a nine-month low. The H4 timeframe shows the price forming the third descending wave. The nearest support is at the level of 2095.
Signal:
Short-term prospects for aluminum suggest selling.
The target is at the level of 2020.
Part of the profit should be taken near the level of 2095.
A stop-loss could be placed near the level of 2250.
The bearish trend is short-term, so trade volume should not exceed 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
