AEGIS Hedging - Metals First Look
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LME Aluminum 3M Select trades $-99.25 lower to $3435.50 at 8:34:14 AM
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(Bloomberg) – Aluminum slumped to a two-month low as a peace deal between the US and Iran laid the groundwork for the resumption of metal shipments through the Strait of Hormuz. Prices for the lightweight metal dropped as much as 3.3% in London, as the two sides agreed to an interim deal, with the strait to reopen when the agreement is signed on Friday. Details of the plan are still being negotiated. The Iran war caused steep supply losses as Middle Eastern aluminum smelters were targeted in missile attacks and the closure of the vital waterway choked off supplies of incoming raw materials and outbound metal. Producers responded with logistical workarounds to keep plants running, but the war still left the industry contending with a major supply deficit. President Donald Trump said he was authorizing the “toll free opening” of Hormuz. Iran will allow free transit through the waterway for only 60 days, Fars news agency reported, citing a person familiar with the matter. Still, shipowners say they still need more details in order to assess whether safe transits are possible, and some analysts expect that the aluminum industry will continue to face an uphill struggle in replenishing diminished reserves as other supply headwinds continue. China has ramped up exports since the war began, but producers are now running into a government-imposed cap on output. Manufacturers have tapped inventories held on exchange and in private storage, and drawdowns may continue while flows from the Middle East remain constrained, according to Gregory Shearer, head of base and precious metals research at JPMorgan Chase & Co. “If the strait does reopen, we could see a knee-jerk drop in prices because aluminum has been highly correlated with energy,” Shearer said. “But we still conclude that the market is facing a major supply gap, and the key question is how much longer it will be before those invisible inventories are depleted, and visible inventories start to be drawn down.”
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LME Copper 3M Select trades $71.25 higher to $13768.50 at 8:34:18 AM
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CME HRC Steel last traded at $1121 and $-2 lower at 8:29:46 AM
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Price Indications
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Today's Charts
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Metals Factor Matrix
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AEGIS Factor Matrices: Most important variables affecting metals prices
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Important Disclosure: Indicative prices are provided for information purposes only, and do not represent a commitment from AEGIS Hedging Solutions LLC ("Aegis") to assist any client to transact at those prices, or at any price, in the future. Aegis makes no guarantee to the accuracy or completeness of such information. Aegis and/or its trading principals do not offer a trading program to clients, nor do they propose guiding or directing a commodity interest account for any client based on any such trading program. Certain information in this presentation may constitute forward-looking statements, which can be identified by the use of forward-looking terminology such as “edge,” “advantage,” “opportunity,” “believe” or other variations thereon or comparable terminology. Such statements are not guarantees of future performance or activities.
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