May 23, 2023

• LME Aluminum 3M Select is down $38/mt, wiping away yesterday’s gains.
  • Last trade was $2,225.5/mt (6:45 AM CST)
  • Shanghai Metal Market continues its bearish comments on the global aluminum market. Overseas demand for aluminum semi-finished is “not good.” As for China, demand remains lower than expected, and new orders from downstream end-users and consumers remain “weak.” (Source: Shanghai Metal Market)
  • Despite the bearish undertone for Chinese demand, the country continues to import large volumes of aluminum, specifically from Russia. Through April, China imported 261,384 mt of Russian aluminum, nearly triple the amount during the same period last year. Last month alone they brought in 88,859 mt, just shy of the record set in August 2020.
• LME Copper 3M Select is down $108/mt and is negative on the year.
  • Last trade was $8,034.5/mt (6:45 AM CST)
  • Chinese end-user copper demand has recently shrunk, according to Shanghai Metal Market. Production of copper rods, which are used in wiring, fell by 3.5% month-over-month in April, due to low orders. (Source: Shanghai Metal Market)
  • Due in part to lower-than-expected Chinese demand, copper prices have dropped significantly since early March, making new lows on the year.
• Prompt month CME HRC Steel last settled at $1,090/st. (6:45 AM).
  • The CME HRC Steel to CME Busheling Scrap spread, which is a key gauge of steel mill profitability, currently sits near $640/st, having dropped nearly $70/st since the highs of late April. If the futures forward curve is an indication of future profitability, then tough times could be ahead for American steel mills. Based on the futures forward curve, steel mill profitability through June 2024 hovers near $400/st, or nearly 40% lower than the current level.

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Price Indications

Today's Charts

AEGIS Insights

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