August 24, 2023

• LME Aluminum 3M Select is down $17.5/mt, taking away about half of this week’s gains.
  • Last trade was $2,157.5/mt (6:45 AM CST)
  • Some of the world’s top miners are diversifying into secondary aluminum production, according to recent reports from the Wall Street Journal. This is largely due to growing scrap supplies from China, as well as the low cost of building an aluminum scrap processing facility. According to Wood Mackenzie, the cost to set up a new aluminum scrap processing facility is one-tenth the cost of building a new primary smelter. The amount of aluminum produced from scrap will grow to 42% by 2050, compared to 26% last year, Wood Mackenzie also estimates. (Source: Bloomberg)
• LME Copper 3M Select is down $66/mt, potentially breaking a five-day streak of gains.
  • Last trade was $8,388/mt (6:45 AM CST)
  • The copper market will be balanced next year, according to Bloomberg’s latest estimates. Due to continued infrastructure buildouts, India’s copper demand will grow by 15%. Meanwhile, emerging markets in Asia will also grow by 5%. Chinese demand will remain subdued and could possibly fall if its faltering real-estate sector does not improve. A continuously weakening Chinese real-estate sector could also weigh on domestic demand for consumer durables. Poor Chinese demand might lead to the destocking of inventories, which could also likely weigh on copper prices. (Source: Bloomberg)
• Prompt month CME HRC Steel last traded at $801/st, down $1/st (6:45 AM CST).
  • Physical HRC prices continue to fall as demand remains subpar. Argus’s weekly domestic HRC assessment fell to $760/st, down nearly 37% from the high seen in early April. Reports from the SMU Steel conference suggest that steel demand for the remainder of 2023 will be “steady.” Some conference attendees fear that if the United Autoworkers union strikes against Stellantis, GM, and Ford, then steel demand could fall even further. (Source: Argus)

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Price Indications

Today's Charts

AEGIS Insights

08/23/2023: AEGIS Factor Matrices: Most important variables affecting metals prices

08/18/2023: Steel Buyers Can Strengthen Pricing Power During Industry Consolidation

08/03/2023: Important US Economic Data (AEGIS Reference)

07/20/2023: Aluminum Prices Could Hinge on Chinese Stimulus

07/11/2023: Copper Prices Could Remain Subdued While African Production Grows

8/22/2023: US HRC: Prices keep falling, sentiment weighs

8/22/2023: No new Novelis deals to buy Russian aluminium since Ukraine war

8/22/2023: Column: BHP sees China commodity demand as stable. And that's the best case

8/21/2023: Russian miners, Chinese investors interested in Polymetal's Russian assets -FT

8/20/2023: Another Chinese property giant flirts with default

8/20/2023: Citi takes delivery of Russian-origin aluminum on LME -Bloomberg

8/20/2023: Column: Trickle of LME zinc deliveries turns into a flood

8/17/2023: Focus: How U.S. Steel became an acquisition target

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