|
A smelter accident earlier this week in Sichuan, China has taken 190,000 mt out of production, according to Shanghai Metal Market. This region, which is one of China’s most important aluminum production regions, is also experiencing other supply issues, as a searing heatwave is causing power shortages and affecting some metals production, according to Bloomberg. Shanghai Metal Market recently stated that several aluminum smelters in the Sichuan and Shandong provinces have curtailed production due to power rationing. |
|
|
|
Further curtailments in top producer China could put upward pressure on aluminum prices. After a precipitous 13.1% drop in prices during 1H 2022, LME aluminum is now up about 2% this quarter. Due to the downward price pressure we saw in 1H 2022, the forward curve for aluminum has shifted lower by nearly $200/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. (8/11/2022) |
||
|
|
||
Note: Clients with AEGIS Platform access can see this and other research, plus hedge portfolio reporting and tools here. |
||
|
|
||
Price Indications |
||
|
|
||
|
|
||
Today's Charts |
||
 |
 |
|
 |
 |
|
AEGIS Insights |
||
|
08/10/2022: AEGIS Factor Matrices: Most important variables affecting metals prices 08/09/2022: Aluminum prices are finding support: Consumers can lock in lower costs in 2023 and beyond 08/02/2022: Russia Finds New Alumina Supply 07/27/2022: American Automotive Production is on the Rebound |
||
|
|
||
| Important Headlines | ||
|
8/9/2022: Aluminium foundry fights for survival in European gas crisis 8/9/2022: Column: Glencore's smelter warning galvanises the zinc price 8/8/2022: Energy industry bright spot for NorthAm steel 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 |
||
|
|
||
|
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.
|
||
