March 17, 2023

News:

• Glencore will not renew its current 1.6 million mt per year purchase agreement with Rusal when it expires in 2024, the company stated on Thursday.
• In March 2022, Glencore stated it won’t do any new business with Russian companies due to the Russia-Ukraine conflict, but it would continue to honor current contracts.

Market Commentary:

• AEGIS notes that this should not materially impact Russian production, as Rusal can likely find new buyers (specifically China).
• However, there is the possibility that more Russian metal could wind up in LME warehouses if that tonnage cannot find a willing end-user or buyer.
• This could be bearish to LME prices, as Rusal (or a trading house like Glencore), needs to sell futures contracts to make delivery into LME warehouses.
• AEGIS does note that Rusal has denied that they have delivered into the LME; however, Glencore has delivered over 170,000 mt into South Korean LME warehouses since last October.
• Despite this bearish overtone, aluminum consumers should contact AEGIS to discuss and implement hedging strategies.  

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

03/15/2023: AEGIS Factor Matrices: Most important variables affecting metals prices

03/14/2023: Why Are Steel Prices Increasing?

02/24/2023: European Aluminum Smelters Improve, But Not Enough To Entice More Production

02/07/2023: Will Aluminum's Rally Continue?

01/24/2023: Peruvian Protests Could Support Copper Prices

01/11/2023: Nickel Prices Could Remain Volatile Into 2023

3/16/2023: Nucor expects higher steel shipments in 1Q

3/16/2023: Glencore will not renew $16 bln aluminium deal with Russia's Rusal

3/15/2023: Portland Aluminium joint venture in Australia to reduce production

3/14/2023: US steel prices driven up by multiple factors

3/13/2023: Molybdenum Oxide Daily Dealer futures contract launches on CME

3/13/2023: India to auction newly found lithium reserve

3/11/2023: Panama gives Canada's First Quantum go-ahead to operate port terminal

3/10/2023: Canada bans Russian aluminum, steel imports

3/10/2023: Panama minister expects contract with First Quantum will get green light

3/9/2023: Germany's Speira to end Rheinwerk aluminium smelting due to energy costs

3/9/2023: Peru mining firms' logistics at risk from extended protests, Fitch says

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.