August 4, 2022

China’s slowing real estate sector has tempered copper demand for wiring and household appliances, according to Maike Metals International, a major China-based copper trader and importer. Maike, therefore, predicts copper prices will hover between $7,000/mt to $8,000/mt for the remainder of 2022, as the real estate sector remains subdued. The company also stated that further interest rate hikes by the US Federal Reserve to cool inflation could also keep a cap on copper prices.

So far, 2022 has been an ugly year for copper prices. The LME 3M Select contract dropped by 15.5% in 1H 2022 and is down another 7% this quarter (7:00 AM CST). Due to this downward pressure, the forward curve for copper has shifted lower by nearly $200/mt since early May. This means that compared to three months ago, end users can lock in lower prices for the remainder of 2022 and into early 2023. Buying swaps or call options or both viable strategies to hedge future needs, as both would establish a maximum copper 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. (8/4/2022)

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Price Indications

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AEGIS Insights

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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.