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ArcelorMittal’s global steel production fell by 12.7% to 30.9 million mt in 1H 2022, due to the ongoing Ukrainian conflict and weak demand. In its 2Q results report, the company also stated that the inflationary pressures due to the Russia-Ukraine conflict have eroded consumer and business confidence. Going forward, the company believes gas supply risks in Europe and COVID lockdowns in China could weigh on demand through the remainder of 2022. |
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This year so far has been an ugly year for steel prices, as prompt month August CME HRC futures have dropped just shy of 50% since mid-March, as last trade was $855/st (7:00 AM CST). This could be a good time for steel end-users such as automotive equipment manufacturers (OEMs) to hedge future needs by buying swaps or call options. Both of these strategies would establish a maximum steel price. Such positions are basic for consumer hedging; however, they can result in opportunity costs or cash costs if metal prices decrease. Please contact AEGIS for specific strategies that fit your operations. (8/1/2022) |
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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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Today's Charts |
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AEGIS Insights |
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07/27/2022: AEGIS Factor Matrices: Most important variables affecting metals prices 07/27/2022: American Automotive Production is on the Rebound 07/20/2022: Interest in Hedging Cobalt is Increasing 07/07/2022: Have Copper Prices Begun to Find a Bottom? |
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7/28/2022: US economy contracts for 2nd consecutive quarter 7/28/2022: ArcelorMittal H1 crude steel output falls 13% on year 7/27/2022: Analysis: Peru's mining execs 'lose faith' in gov't despite moderate shift 7/26/2022: US HRC: Prices fall, large buys reported 7/26/2022: Column: Where there's muck there's brass ... and critical minerals 7/26/2022: Why China’s economic measures may not be enough to drive up consumer demand 7/25/2022: LME won't ban Nornickel's metal as Russian firm isn't under UK sanctions -sources 7/24/2022: Column: Aluminium producers feel the margin pain as price slumps 7/22/2022: Cliffs expects automotive steel demand rebound by year-end: CEO
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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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