Aluminium and crude palm oil prices face all-time highs
Both aluminium and crude palm oil price rose to their strongest levels on record as market participants saw multiple disruptions over their inventories and supply.
Aluminium: Price increased by 10% in two weeks
Aluminium has hit a new all-time high of $3,313 due to the escalating concerns over inventories and further supply disruptions. The boiling tension between Russia and the West has raised prospects of sanctions on one of the world's largest metal suppliers. As a result, the threat to the supply has triggered the soaring appetite for aluminium stocks and pushed the price to the sky.
In the eastern world, China's aluminium production has been halted as the government restricted the pollution for the winter Olympics. The price of the key metal commodity has been rising by more than 10% for the past two weeks.
The daily chart has shown that the price of aluminium has been following the ascending moving band since the end of December. The previous pressure level, October high at 3180, has now turned to support the price. Overall, the momentum remains on the upside as a pack of strong bull signs in prospect: a series of high lows, up-pointing 20, 50, and 100 days moving average, and a relatively high trading volume even when the price touched an all-time high.
Aluminium Daily Chart
Crude Palm Oil: Production and supply issue escalates
Like many commodities, palm oil, has enjoyed an excellent year in 2021 and continues the momentum in the New Year: its price has now almost doubled for the past 12 months.
This week, Malaysian palm oil futures were trading around MYR 5,931 per tonne, an all-time high to face the recent record on January 30th amid robust demand and supply constraints.
The supply for the sought-after oil is pointed to get tighter as total palm oil inventory in February fell 3.85% and production dropped by 13.54%.
The world's top palm oil producer, Indonesia, also adds extra significant pressure to the supply by requesting its producers to sell 20% of their planned exports to the domestic market only.
An up-moving trajectory can be noticed on both daily and weekly charts, which is expected to see the price of crude palm keep challenging a new high. The only sign that could raise the alarm is the RSI indicator, which has reached the overbought territory with a four-week-high reading from the weekly chart. As such, a near-term breather might be on the table before the price climbs to another hilltop. For bull buyers looking for an entry point, the current support at MYR 5824 should be a critical level worth keeping a close eye on.
Crude Palm Oil Weekly Chart
Crude Palm Oil Daily Chart
Take your position on over 13,000 local and international shares via CFDs or share trading – and trade it all seamlessly from the one account. Learn more about share CFDs or shares trading with us, or open an account to get started today.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Live prices on most popular markets
- Forex
- Shares
- Indices
