March 19, 2024

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• LME Aluminum 3M Select is down $23.5/mt, falling back into the sideways trend.
  • Last trade was $2,253/mt (6:45 AM CST)
  • China could soon require the country’s primary aluminum smelters to participate in a carbon trading program to reduce the industry’s emissions. Market sources told S&P Global that such a program could raise costs for smelters that rely on fossil fuels and push the industry to greener technologies. About 60% of Chinese primary aluminum producers use fossil fuels such as coal for electricity generation, while the remainder use renewable sources such as hydropower. These sources also stated that such a program would benefit secondary aluminum producers who use scrap as a raw material and, therefore, are less energy intensive. The consultation period in which the country’s aluminum smelters can opine on the potential carbon trading programs ends on March 31. Given that this is still in the debate stage, it is unclear how much of an impact this could have on Chinese primary aluminum production.  (Source: S&P Global)
• LME Copper 3M Select is down $109/mt, falling from 11-month highs.
  • Last trade was $8,993/mt (6:45 AM CST)
  • Chinese economic data continues to be mixed. On Monday, government data showed that industrial output for January and February combined jumped by 7% compared to a year ago. Meanwhile, property development investment fell by 9% compared to last year. Despite the production issues that have rallied global copper prices, China’s lackluster property sector could remain a burden. (Source: Bloomberg)
• Prompt month CME HRC Steel last traded at $795/st, down $4/st (6:45 AM CST).
  • Late last week, Cleveland Cliffs proclaimed it would make another offer for US Steel if Nippon Steel’s potential buyout falls through. Cleveland Cliffs’ offer would be only $30/share, far lower than Nippon’s $55/share offer. It’s unclear if this tactic would work, but it would alleviate one concern many US lawmakers and President Biden have raised. Recently, President Biden stated that US Steel should remain a US-owned and operated company, and several other government officials have echoed similar comments. (Source: Reuters)  

Price Indications

Today's Charts

AEGIS Insights

3/14/2024: Important US Economic Data (AEGIS Reference)

3/13/2024: AEGIS Factor Matrices: Most important variables affecting metals prices

2/27/2024: Aluminum Consumers Should Still Implement Hedges, Even Though Russia Sanctions Mean Little

2/2/2024: China's Real Estate Woes Provide Opportunity for Copper Consumers

1/25/2024: Aluminum Starts 2024 On a Down Note, But Potential Supply Shocks Give Consumers a Reason to Hedge

3/18/2024: China starts consultation for enrolling aluminum smelters into compliance carbon market

3/18/2024: Indonesia says nickel miner Vale to build another $2 bln HPAL plant

3/15/2024: Cleveland-Cliffs CEO mulls much lower bid for US Steel if Nippon deal falls apart

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