August 31, 2023

• LME Aluminum 3M Select is up $5/mt, adding to this week’s gains.
  • Last trade was $2,206/mt (6:45 AM CST)
  • China’s aluminum production shows no sign of slowing. The country’s total domestic operating aluminum capacity is approaching 42.7 million mt per year, a record high according to Shanghai Metal Market (SMM). This means operating capacity utilization, which measures how much of their production capabilities they are using, is nearly 95%. As for demand, SMM sent mixed signals as “higher prices suppressed buying appetite,” but “the peak season is coming, hence market expectations have improved.” (Source: Shanghai Metal Market)
• LME Copper 3M Select is down $74.5/mt, pulling back after three days of gains.
  • Last trade was $8,393.5/mt (6:45 AM CST)
  • The Democratic Republic of Congo (DRC), a large and growing copper and cobalt producer, is seeking to regain control of large projects sold off in recent years. According to the DRC, Eurasian Resources Group (REG), a Kazakhstan-backed miner with dozens of mining and exploration permits in the DRC, has been slow to develop numerous projects. Neither side has formally announced any bids or offers or what assets could exchange hands. The DRC is the world’s largest cobalt producer, with nearly 70% of global production. It is also now tied for second place with Peru in copper production. (Source: Bloomberg, USGS)
• Prompt month CME HRC Steel last traded at $725/st, down $4/st on the day (6:45 AM CST).
  • US Steel is currently reviewing several buyout offers and has signed several confidentiality agreements, the company told its shareholders earlier this week. Although there have been several suitors, Cleveland-Cliffs, a rival steel producer, is the apparent front-runner to buy out US Steel. The current bidding war over US Steel stems from the company's recent poor financial performance due to falling revenues while energy and raw material costs increased. (Source: Bloomberg)

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

08/30/2023: AEGIS Factor Matrices: Most important variables affecting metals prices

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

8/30/2023: SMM Spot Aluminum Market Comment: High Aluminum Prices Dented Buying Appetite

8/30/2023: Indonesian nickel smelters turn to Philippines for ore as local supply tightens

8/29/2023: Column: South Korea's Gwangyang is the new LME aluminium battleground

8/29/2023: Chinese steel demand declining less than data suggests, says Vale executive

8/29/2023: U.S. Steel starts due diligence after entering agreements with 'numerous third parties'

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

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

8/24/2023: Congo wants ERG copper, cobalt assets in bid to regain control

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

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