What Happened
Commerzbank analyst Norman Liebke has flagged that upcoming EU Emissions Trading Scheme (ETS) reforms — specifically new benchmark calculations — could significantly lift operating costs for European aluminium recyclers and refineries. While this is a forward-looking regulatory risk rather than an immediate price move, it adds a bearish cost overhang to European aluminium producers and could influence global aluminium pricing dynamics. LME Aluminium is currently trading near $2,320/tonne, having pulled back roughly 3.2% from its recent high of $2,398/tonne set earlier this month.
Key Levels
- Support 1: $2,280/tonne — a key horizontal floor that held during the March sell-off
- Support 2: $2,200/tonne — major structural support and the 200-day moving average zone
- Resistance 1: $2,370/tonne — the area where sellers stepped in this week
- Resistance 2: $2,398/tonne — the recent swing high; a break above here would signal renewed bullish momentum
Technical Picture
Aluminium is in a short-term downtrend after failing to hold above $2,370. The price is sitting below its 20-day moving average (currently near $2,345), which is acting as dynamic resistance. RSI is hovering around 42 — not yet oversold, suggesting there may be more downside room before buyers return with conviction. The broader trend over 3 months remains sideways-to-bearish.
What Traders Are Watching
The critical level is $2,280. A daily close below this price would likely open the door to a test of $2,200 — a level that would attract significant attention from value buyers. On the upside, bulls need a clear break and hold above $2,370 to shift momentum. The EU ETS reform timeline will also be closely monitored, as any confirmation of higher cost benchmarks could accelerate selling pressure on European aluminium-linked equities and futures.
Bias
Bearish. Regulatory cost headwinds from EU ETS reform, combined with a price sitting below key moving averages and struggling to reclaim $2,370 resistance, favour the downside in the near term.