August 30, 2023

• LME Aluminum 3M Select is up $12/mt, continuing yesterday’s rally.
  • Last trade was $2,180/mt (6:45 AM CST)
  • Yunnan province, which is China’s top aluminum production region, will likely be subjected to long-term energy challenges, according to a recent note from Morgan Stanley. “As the world exits a decade of cheap, abundant power, electricity-intensive aluminum output is likely to become more challenged,” they proclaimed. Specifically, regarding Yunnan province, they stated, “The situation in Yunnan highlights the difficulties of an industry dependent on a stable source of power trying to switch to renewables and deal with seasonality.” Hydropower issues due to a severe, ongoing drought in Yunnan province led to significant curtailments at many of the region’s aluminum smelters. Production has only recently ramped up after significant rainfall eased the hydropower issues. (Source: Bloomberg)
• LME Copper 3M Select is down $27.5/mt, pulling back slightly.
  • Last trade was $8,427.5/mt (6:45 AM CST)
  • The sale of Zambia’s state-owned Mopani Copper Mines (ZCCM), which has experienced many production and financial problems, is dragging on longer than expected, as the government hoped to find a buyer by the end of July. On Tuesday, Sibanye Stillwater, a large South African precious metals producer, stated it is still “in the hunt” for ZCCM despite the prolonged sale process. Sibanye Stillwater has recently expanded its portfolio to include nickel and lithium assets in Europe and the US. (Source: Reuters)
• Prompt month CME HRC Steel last traded at $728/st, unchanged on the day (6:45 AM CST).
  • A possible autoworkers strike next month could lead to a significant amount of steel being sold onto the spot market, Argus proclaimed late last week. Wolfe Research recently stated that up to 90,000 short tons/month of steel demand could be lost if a strike occurs. The looming strike and its market implications were a hot topic at last week's SMU Steel Summitt. (Source: Argus)

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Price Indications

Today's Charts

AEGIS Insights

08/25/2023: Growing Secondary Aluminum Supply Could Further Weigh on Prices

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

8/29/2023: Sibanye still in race for Zambia's Mopani Copper Mines

8/24/2023: Auto strike risk looms over US steel market

8/23/2023: Korea sees limited impact from Mexico steel tariff hike

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