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Ongoing COVID lockdowns have not slowed China’s aluminum production or exports. The country exported 597,000 mt of aluminum in April, the second-largest ever monthly volume, according to Bloomberg and Chinese Customs data. Production was 109,900 mt/day last month, up by 3,000 mt/day compared to March, according to a survey of smelters by Shanghai Metals Markets. Capacity utilization, which measures how much available production capacity the industry is using, was nearly 91.6% in early May. Global aluminum prices fell while China’s production and exports increased. LME Aluminum 3M was down 12.5% in April, making it the worst month since 2008. Prices could continue to drop if Chinese production stays high while they unload excess inventory onto the world market. |
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Consumers who are concerned about their aluminum 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. (5/10/2022) |
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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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05/04/2022: AEGIS Factor Matrices: Most important variables affecting metals prices 04/21/2022: Russian Metals Production and Related News: Most Recent Developments (AEGIS Reference) |
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5/6/2022: CME explores nickel contract after LME trade chaos |
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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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