Weekly European Commodity Winners
Aluminium Alloy 3M (Cash) (P2Y00), +6%
The supply of aluminium remains tight in Europe, due to both reduced Russian imports amid sanctions and less internal production. LME stocks are at 531,035, which is very low, while LME futures and options net positions remain at 106,749 contracts as of Feb. 14, which is also bullish.
Forecasts are optimistic for the metal in 2025 which is expected to rise further in the next months. However, the U.S. administration is likely to relax sanctions on Russia, which will increase supply. China reported 44 million mt production in 2024, which already marks a record.
The $2,250 level has been resistance since February 2021, so long traders might want to wait for a breakout from here.
White Sugar #5 (SWK25), +4%
Fundamental factors drove the action, as extreme flooding in Australia is damaging the sugarcane crop. There are already supply disruptions increasing the price of sugar products. India has set an export quota of one million mt for this season, unfavorable weather conditions and mill closures are challenging that target.
In February 2025, the USDA reported a reduction in the sugar supply from last month by 101,000 tons, noting lower production and imports. The market is already talking about a supply squeeze in the short term.
Technically, the market is in a clear uptrend above the 10-, 20-, and 50-day exponential moving averages (EMAs). The 10 EMA is currently the best dynamic support.
The 14-day Relative Strength Index (RSI) is past the overbought area at 73.34, but candles are not showing a reversal yet. For now, the longs are in control.
European Commodity Losers This Week
Cocoa #7 (CAK25), -13%
The Ivory Coast, the world's top producer, reported that the 2024-25 cocoa output will be in line with previous season's levels of 1.80 million metric tons.
Bad weather conditions continue, with crop disease being another factor. Moreover, certified cocoa stocks have reached a 21-year low, worsening the current supply shortage. The forward curve is pointing sharply downwards, so there is more optimism for bigger supplies towards the end of the year.
Technically, in the last four sessions, cocoa prices have crossed below the 10-, 20-, and 50-day EMAs, which shows a downtrend. There is strong support at 6,700, but it remains to be seen if the bounce over the last 2 sessions will put cocoa prices back in an uptrend.
UK Natural Gas (NFH25), -10%
Europe's liquefied natural gas (LNG) imports decreased by 19% in 2024, with gas demand reaching an 11-year low, according to IEEFA. There are many demand reduction policies and a shift towards renewable energy sources. But the biggest fundamental news came from ongoing lengthy peace negotiations between Russia and the U.S., which might significantly increase the global supply, with further downward pressure on prices.
This is already reflected in the forward curve in the middle term, with declining prices starting from February 2026.
Technicals are pointing to a strong downtrend, with prices well below the 10-, 20-, and 50-day EMAs. The next support is at $98.70, so long traders may add positions here.
Note that the 14-day RSI at 30.16 is in oversold area, and statistically this is a reliable indicator for this contract. Long traders should watch out this week for any reversal signs in the candles.
