January 5, 2024

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• LME Aluminum 3M Select is down $23.5/mt, continuing the recent slump.
  • Last trade was $2,261.5/mt (6:45 AM CST)
  • As of last Friday, investment funds, which are purely speculators in metals markets, are net long approximately 9,800 contracts of LME aluminum, having purchased about 46,000 contracts since the December 8 close. The repositioning that occurred in the last three weeks of December covered their largest short position since the early of the pandemic. LME aluminum prices are highly sensitive to the actions of these investment funds, so this is likely why prices rallied nearly 9% in December. (Source: LME)
• LME Copper 3M Select is down $28.5/mt, sitting near the lows of the week.  
  • Last trade was $8,453/mt (6:45 AM CST)
  • Some analysts are extremely bullish on copper demand and prices over the next few years. In a report from last month, Citigroup proclaimed that if global renewable energy capacity triples by 2030, as outlined at the recent COP28 conference, copper demand would jump by 4.2 million mt by the end of the decade. In the medium, this predicted surge in demand would cause copper to rally to $15,000/mt, or nearly 75%, by the end of 2025. These analysts did caveat that by saying, “This assumes a very soft landing in the U.S. and Europe, an earlier global growth recovery, significant China easing" (Source: Bloomberg)
• Prompt month CME HRC Steel last traded at $1,100/st, up $1/st (6:45 AM CST).
  • The US manufacturing sector has contracted for 14 straight months, according to a recent survey. According to the Institute of Supply Management (ISM) latest survey, “US manufacturing sector continued to contract, but at a slightly slower rate in December as compared to November. Companies are still managing outputs appropriately as order softness continues." The ISM’s purchasing managers’ index (PMI), a key gauge of manufacturing activity, rose to 47.4 last month, up from 46.7 in November. A reading below 50.0 signals that the sector is contracting, while above 50.0 signals expansion. Given that the US manufacturing sector is one of the top sources of domestic steel demand, a continually contracting sector will continue to weigh on steel prices and demand. (Source: Argus)

Price Indications

Today's Charts

AEGIS Insights

1/3/2024: AEGIS Factor Matrices: Most important variables affecting metals prices

12/8/2023: Aluminum and Copper Markets Diverge but Hedging Opportunities Persist for End-Users

12/06/2023: Important US Economic Data (AEGIS Reference)

11/17/2023: Aluminum and Copper End-Users Should Hedge As Inflation Eases

1/3/2024: Cleveland-Cliffs Announces Price Increase for Hot Rolled, Cold Rolled and Coated Steel Products

1/2/2024: US construction spending up in November, metals mixed

12/29/2023: Viewpoint: US EAF growth fuels prime scrap demand

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.