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Total P1020 aluminum imports from January through June soared by 41.6% to approximately 1.073 million mt, according to US Census Bureau data. However, market participants interviewed by S&P Global late last week proclaimed that US aluminum import demand could drop in the coming months as automotive demand is starting to show signs of weakness, and rising interest rates are weighing on the housing sector. Also, rising scrap flows are replacing some primary demand as well. |
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Are aluminum prices approaching a bottom? The LME 3M Select contract dropped by 13.1% in 1H 2022, but is nearly unchanged this quarter (7:00 AM CST). Due to this downward pressure, the forward curve for aluminum has shifted lower by nearly $300/mt since mid-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 aluminum 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. (8/9/2022) |
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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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Price Indications |
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Today's Charts |
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AEGIS Insights |
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08/03/2022: AEGIS Factor Matrices: Most important variables affecting metals prices 08/02/2022: Russia Finds New Alumina Supply 07/27/2022: American Automotive Production is on the Rebound 07/20/2022: Interest in Hedging Cobalt is Increasing |
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| Important Headlines | ||
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8/7/2022: US Senate passes landmark bill to tackle climate 8/5/2022: US imports of unalloyed aluminum continue to rise loosening supply further 8/5/2022: FUTURES WRAP: LME scrap contract reaches all-time daily trading volume high
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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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