January 17, 2024

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• LME Aluminum 3M Select is down $27/mt, wiping away yesterday’s gains.
  • Last trade was $2,187/mt (6:45 AM CST)
  • The net long position that investment funds held in LME aluminum lasted a mere two weeks. As of last Friday, investment funds, which are purely speculators in metals markets, are net short approximately 940 contracts of LME aluminum, according to the LME’s most recent COT report, released yesterday. In the final report of 2023, these funds were net long roughly 9,800 contracts. Given that aluminum prices are highly susceptible to investment fund positioning, this could be why prices are down nearly 8% in January. (Source: LME)   
• LME Copper 3M Select is down $22/mt but is well off the morning lows.  
  • Last trade was $8,323/mt (6:45 AM CST)
  • China’s copper smelters produced a record volume last year, but that output might fall this year due to dwindling supply and lower profit margins. Treatment charges, the fees miners pay to have their raw copper processed into refined metal, have fallen to the lowest level in over two years. This drop in fees has dramatically reduced profit margins for many smelters while others are essentially breaking even. Unless the mined copper supply increases, these smelters could run at reduced output and profitability for some time. (Source: Bloomberg)
• Prompt month CME HRC Steel last traded at $1,069/st, down $4/st (6:45 AM CST).
  • In addition to winding down and selling some of its copper assets, First Quantum Minerals will also reduce operations at its Australian nickel mine, the company announced earlier this week. This mine has been hit with a double whammy in recent years, as global nickel prices have fallen dramatically while operating costs have remained high. It will cease mining operations for the next two years and only sell from its current stockpile. The process of reducing the current inventories will take about 18 to 24 months, after which the company will resume mining operations. The operation processed 5,490 mt of nickel in 3Q2023. (Source: Bloomberg, Reuters)

Price Indications

Today's Charts

AEGIS Insights

1/11/2024: Important US Economic Data (AEGIS Reference)

1/10/2024: AEGIS Factor Matrices: Most important variables affecting metals prices

1/4/2024: Year-End Review of LME Aluminum, Copper, CME HRC Steel and Hedging Implications for 2024

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

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

1/16/2024: Most cobalt producers loss-making after 2023 price slump - ERG

1/15/2024: London Metal Exchange's growing Russian aluminium problem

1/15/2024: LME to suspend 10% of listed metals brands until they submit responsible sourcing audit

1/15/2024: First Quantum to cut Australian nickel mine output, slash workforce

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