September 28, 2023

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• LME Aluminum 3M Select is up $28.5/mt, nearing a two-month high.
  • Last trade was $2,266/mt (6:45 AM CST)
  • China’s primary aluminum imports spiked in August and could jump again in September while the import arbitrage continues to improve. The spread between spot SHFE and LME prices is generally used to estimate the import arbitrage that Chinese aluminum importers are subjected to. Based on monthly average prices, this spread currently hovers near $446/mt (SHFE over LME), the highest level of 2023. This could suggest that Chinese importers might grab cheaper foreign supplies, and price spreads remain advantageous. (Source: China Customs, SHFE, LME)
• LME Copper 3M Select is up $82/mt, bouncing after five days of losses.
  • Last trade was $8,162/mt (6:45 AM CST)
  • Codelco, the Chilean state-owned copper miner and the world’s largest, will meet its obligations despite slumping output, JP Morgan recently stated. In a note earlier this week, JP Morgan stated, “We believe Codelco will be able to meet all of its financial obligations despite the elevated capex budget and operational issues it has faced that has led to reduced production and increased unit costs.” The Chilean government could also increase financial support to Codelco, JP Morgan predicts. At 1.55 million mt, Codelco’s 2022 copper output fell to a 25-year low due to a myriad of production issues and could slump to approximately 1.31 million mt in 2023, the company recently stated. (Source: Reuters)
• Prompt month CME HRC Steel last settled at $712/st (6:45 AM CST).
  • Prices for nickel, a key raw material in stainless production, have dropped nearly 38% this year due to falling demand. This slumping demand comes while global production has increased due to new plants in China and Indonesia. Despite the recently poor demand, inventories at LME warehouses remain near 15-year lows. (Sources: Bloomberg, LME)

Price Indications

Today's Charts

AEGIS Insights

09/27/2023: AEGIS Factor Matrices: Most important variables affecting metals prices

09/12/2023: Important US Economic Data (AEGIS Reference)

09/08/2023: Despite Price Slump, Hedging is Still Feasible for Steel Producers

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

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

9/27/2023: Chile's Codelco sees copper output starting to recover in 2024

9/26/2023: Chile's Codelco to meet obligations as financials deteriorate -JPMorgan

9/26/2023: China powers global aluminium output to record high: Andy Home

9/26/2023: Taiwan scrap imports slip 9pc on year in Aug

9/25/2023: Hydro signs long-term power contract with Alpiq

9/25/2023: Steelmaker SSAB flags possible staff cuts in Finland as demand falls

9/25/2023: Ford, Unifor ratify 3-year auto contract

9/25/2023: Central banks across Europe pause for breath after mammoth rate hike run, but face ‘triple dilemma’

Important Disclosure: Indicative prices are provided for information purposes only, and do not represent a commitment from AEGIS Hedging Solutions LLC ("Aegis") to assist any client to transact at those prices, or at any price, in the future. Aegis makes no guarantee to the accuracy or completeness of such information. Aegis and/or its trading principals do not offer a trading program to clients, nor do they propose guiding or directing a commodity interest account for any client based on any such trading program. Certain information in this presentation may constitute forward-looking statements, which can be identified by the use of forward-looking terminology such as “edge,” “advantage,” “opportunity,” “believe” or other variations thereon or comparable terminology. Such statements are not guarantees of future performance or activities.