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Production issues from the world’s largest copper miner, Codelco, could spark a copper price rally into 2023. In a statement released late last week, the Chilean producer lowered its 2022 production estimate to between 1.49 million to 1.51 million mt, down from its prior estimate of 1.61 million mt. Comparatively, production in 2021 was 1.618 million mt, according to Reuters. The company cited declining ore grades and lower recovery levels at several sites for the decline in production. Also, several construction projects have been halted due to worker fatalities, thereby delaying future production endeavors. |
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With the last trade at $7,854/mt (7:00 AM CST), the LME 3M Copper contract has bounced about 13% off the July 15 low. End-users such as home builders who are concerned about a further escalation in prices might consider buying swaps or call options, as either 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. (8/30/2022) |
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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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8/24/2022: Chinese Aluminum Supply Issues Could Rally Prices 8/24/2022: AEGIS Factor Matrices: Most important variables affecting metals prices 8/16/2022: Zinc Prices Are On The Rebound Due To Supply Issues 8/9/2022: Aluminum prices are finding support: Consumers can lock in lower costs in 2023 and beyond |
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| Important Headlines | ||
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8/29/2022: Copper price back below $8,000 as hawkish Fed outweighs supply risk 8/26/2022: China's aluminum prices seen volatile as power crunch disrupts production: sources 8/26/2022: Codelco lowers 2022 copper production outlook 8/26/2022: Steel prices near bottom: Stelco 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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