April 12, 2022

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.

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)

Note: Clients with AEGIS Platform access can see this and other research, plus hedge portfolio reporting and tools here. 

Price Indications

Today's Charts

AEGIS Insights

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)

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