Aluminium and crude palm oil prices face all-time highs

[MongiIG]

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.

Source: Bloomberg

 

Aluminium Palm oil Petroleum Price of oil Commodities Inventory

Hebe Chen | Market Analyst, Australia | Publication date: Wednesday 23 February 2022 

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

Source: IG

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

Source: IG

Crude Palm Oil Daily Chart

Source: IG

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