April 20, 2023

News:

• The worsening drought in China’s top aluminum production region, Yunnan province, could force more aluminum smelters to curtail output, Mysteel said in a note earlier this week.
• The province has 5 million mt in annual production capacity, but two recent rounds of curtailments have already put approximately 1.84 million mt out of commission.
• The government issued another round of power cuts earlier this month, but aluminum smelters weren’t included in the latest round.
• Yunnan province, which relies on hydropower for its aluminum production, has only had about 40% normal rainfall so far this year, leading to power rationing throughout the region.

Market Commentary:

• Even though aluminum smelters were not included in the latest round of power cuts, smelters could eventually be targeted.
• This could lead to higher aluminum prices both domestically and internationally.
• If you are an aluminum end-user that is subject to upside price risk, please contact AEGIS regarding 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

04/19/2023: 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

4/19/2023: Factbox: Red-hot copper riding a new wave of consolidation

4/19/2023: Column: China's loss of import appetite damps copper's bull fires

4/17/2023: Column: Tin spooked by threat of supply disruption in Myanmar

4/16/2023: Column: LME volumes still subdued a year after nickel crisis

4/16/2023: Big copper deals to take centerstage in Santiago as demand heats up

4/15/2023: Glencore digs in for battle as momentum shifts against Teck

4/14/2023: Copper price is rallying but China stimulus could be “phantom tailwind”

4/14/2023: TRADE REVIEW: Lithium prices to be pressured in Q2 by low demand, higher feedstock supply

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