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COVID lockdowns have forced electric-vehicle manufacturer Nio to stop production at three Chinese factories, according to marketwatch.com. The company stated “Since March, due to reasons to do with the epidemic, the company’s supplier partners in several places including Jilin, Shanghai and Jiangsu suspended production one after the other and have yet to recover. Due to the impact of this Nio has had to halt car production.” Other auto manufacturers, including Tesla, VW, and BMW have closed plants in Shanghai and elsewhere in China due to lockdowns, according to Reuters and Bloomberg. Shanghai, which at 25 million people is China’s largest city and an important industrial hub, entered a lockdown in March to repel a rapid rise in COVID cases. Other areas have also entered full or partial lockdowns, leading to a drop in demand for aluminum and other base metals. |
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Consumers who are concerned about their metals input costs should consider financial swaps or purchasing call options. Such positions are standard for consumer hedging, but they can result in opportunity costs or cash costs if metal prices decline. Please contact AEGIS for specific strategies that fit your operations. (4/12/22) |
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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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AEGIS Insights |
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04/06/2022: AEGIS Factor Matrices: Most important variables affecting metals prices 04/05/2022: Russian Metals Production and Related News: Most Recent Developments (AEGIS Reference) |
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4/11/2022: METALS-Industrial metals fall as firmer dollar, China's COVID woes weigh 4/11/2022: China’s Nio halts EV production as COVID lockdowns disrupt its supply chain |
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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.
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