June 7, 2022

AEGIS is attending the Harbor Aluminum Summit at the Radisson Blu Aqua Hotel in Chicago on June 7 – 9. If you would like to schedule a meeting during the summit, please contact Patrick McCrann at pmccrann@aegis-hedging.com or (713) 936-2806.

China’s COVID lockdowns, which started in March, have weighed on copper demand and global prices in recent months. Prior to Monday, LME copper prices dropped from $10,080/mt to $9,520/mt, or 5.5%, between March 1 and June 1. However, LME Copper 3M Select surged $223/mt to $9,743/mt on Monday, the highest level since late April, after Shanghai eased lockdowns late last week and allowed companies to resume production. Still, it will take a while for manufacturing volumes to return to normal, according to Bloomberg. One analyst quoted by Reuters on Monday asserted "We agree with this directionally but remain cautious as we still believe a timely and decisive rollout of stimulus measures, over and above what has been announced, from China is required to support prices at current levels."

Even with the bounce in prices this week, the LME Copper 3M Select contract is nearly unchanged on the year. End users might take advantage of the lackluster price action by using simple hedges involving swaps and call options. These could cap your copper costs, guarding against a price recovery. 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. (6/7/2022)

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Price Indications

Today's Charts

AEGIS Insights

06/1/2022: AEGIS Factor Matrices: Most important variables affecting metals prices

05/23/2022: India's Steel Exports Tariffs Shock Producers

05/11/2022: China's Metals Exports are on the Rise

6/6/2022: Stronger China demand prospects propel copper to five-week peak

6/3/2022: Peru Cabinet meeting ends with no word on Las Bambas mine crisis

6/2/2022: Copper price scales $10,000 on Chinese stimulus, lockdown reprieve

6/1/2022: UPDATE 1-Global aluminium producers seek Q3 premiums of $172-$177/T in Japan talks - sources

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.