August 26, 2022

Copper prices could be on the rebound, as China announced a $146 billion stimulus package that focuses on new infrastructure and housing. China’s property sector has been hit in recent months as home prices and sales volumes have fallen, according to Bloomberg. Home builders, many of which are cash-strapped and debt-ridden, have stopped construction on new projects, thereby weighing on copper demand. Also, one analyst interviewed by Bloomberg on Thursday proclaimed that copper prices could stabilize due to low global inventories.

Copper prices have tumbled in recent months. Compared to three months ago, LME Copper’s forward curve has shifted vertically lower by nearly $1,200/mt. Also, the forward curve is now in backwardation, meaning that futures prices are lower than spot. This could be a good time for copper end-users such as home builders to hedge future needs into 2023 by buying swaps, as this strategy would establish a maximum copper price. Such positions are standard 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. 

*Please note that due to the UK Summer Bank holiday, the LME will be closed on Monday, August 29. We will not produce the First Look that morning. However, the trading desk will provide CME coverage, and current clients can contact metals@aegis-hedging.com for indications. * (8/26/2022) 

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

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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.