March 20, 2023

News:

• US Steel said last Thursday it has reopened its 1.5 million st/yr furnace in Gary, IN due to improved demand.
• This furnace had been idled since September 2022 due to poor steel prices and high import volumes.
• The company in February had already reopened the 1.4 million/yr furnace at Mon Valley Works in Pennsylvania.

Market Commentary:

• AEGIS notes that most American steel producers have more than doubled their base price for physical sales to $1,100/st or higher compared to late last fall due to this uptick in demand.
• This in turn has led to a significant rally in CME HRC futures. Most of the rally in CME HRC has occurred towards the front end of the futures forward curve, leading to a severely backwardated market.
• We do note that production capacity has been increasing since early January while prices have been rising due to increasing demand.
• Please contact AEGIS on how steel consumers should hedge in a severely backwardated market.

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: US Steel restarts idled Indiana furnace

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.