AEGIS Hedging - Metals First Look
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Note: Clients with AEGIS Platform access can see this and other research, plus hedge portfolio reporting and tools here.
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LME Aluminum 3M Select trades $-15.75 lower to $3364 at 8:39:46 AM
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(Bloomberg) – Aluminum steadied near its lowest since March as booming Chinese production boosted supplies and investors weighed the potential return of Middle East smelters to the global market. This week’s decline is largely a response to the prospect of a US-Iran deal, which offers a pathway, although uncertain, for the Middle East’s substantial aluminum industry to recover output. But while the Iran war has roiled trading for months, a quieter effort in China to put smelters into overdrive has also become a key talking point and risk. Production of primary aluminum hit a fresh monthly record in May, according to China’s National Bureau of Statistics, potentially weighing on prices if sustained. Annualized output of the first five months of the year has reached 46.5 million tons — significantly above a government-imposed cap on annual capacity at about 45 million tons. Global buyers have faced higher costs since late February, when smelters in the Middle East were effectively cut off from the global market. China’s rising output and exports have offered some relief, taking some of the edge of the global supply shock. There has also been a renewed government drive to inspect energy use and efficiency, which may also impinge on output. Smelters in Guangxi, a key production hub, have already been forced to trim production, and output in May was down slightly on a daily basis versus April. “The broader message is consistent: China’s aluminum system is operating at historically elevated utilization levels with limited remaining supply elasticity,” Citigroup wrote in a note last month.
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LME Copper 3M Select trades $13.50 higher to $13759.50 at 8:39:44 AM
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CME HRC Steel last traded at $1122 and $2 higher at 4:30:40 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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