April 4, 2024

Note: Clients with AEGIS Platform access can see this and other research, plus hedge portfolio reporting and tools here. 

• LME Aluminum 3M Select is down $8/mt, stalling after yesterday’s near 3% rally.
  • Last trade was $2,432/mt (6:45 AM CST)
  • Investment funds, generally speculators in metals markets, significantly added to their net long position in LME Aluminum last week. As of last Friday, these investment funds are net long approximately 18,200 contracts, having purchased about 3,300 (net) contracts last week. This position is the largest these funds have had since last November. These investment funds can significantly influence price movement, so it’s likely that they have added to their long position this week, given the nearly 4% rally (as of this writing). AEGIS does caution that aluminum prices are nearing the upper end of the recent trading range, which could give these investment funds pause to add more to their long position at these higher prices. (Source: LME)
• LME Copper 3M Select is up $44/mt, the highest level since January 2023.
  • Last trade was $9,339/mt (6:45 AM CST)
  • Unlike aluminum, investment funds have been selling copper, which has pressured prices. As of last Friday, investment funds are net long 35,145 contracts, down from 37,860 contracts on March 15. In that time, the benchmark LME Copper 3M fell by just over 2%. Given the rally so far this week, it’s likely that investment funds have done some buying, despite a mixed supply-demand picture. As Chinese brokerage GF Futures stated earlier this week, “The macro front is still focusing on a potential rate cut in June while China economics data improved with exports picking up,” GF Futures wrote in a note. There’s also supply-side support for copper in the form of potential output reductions in China.” (Source: LME)
• Prompt month CME HRC Steel last traded at $857/st, down $22/st (6:45 AM CST).
• Trading activity in CME Lithium Hydroxide has surged in recent months, with more speculators entering the market. At the end of 1Q2024, open interest stood at a record 24,328 contracts, with trading activity taking place through the September 2025 contract. Trading volume last quarter alone nearly matched all that occurred last year, the CME also stated. If you are an end-user of battery metals such as cobalt or lithium hydroxide, please get in touch with AEGIS for strategies. (Source: Bloomberg)

Price Indications

Today's Charts

AEGIS Insights

4/4/2024: AEGIS Factor Matrices: Most important variables affecting metals prices

4/3/2024: Important US Economic Data (AEGIS Reference)

3/20/2024: Midwest Premium Buyers Should Hedge While Prices Hover at 3-Year Lows, and Demand Appears To Be Stabilizing

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

4/1/2024: Weak supply and demand to prevent aluminum prices from going up

3/31/2024: Nippon Steel emphasises its 'deep roots' in the US as it pursues U.S. Steel deal

3/30/2024: Russia's Nornickel: Some EU clients refuse to buy products made of Russian metal

3/29/2024: US talks often with Congo's Gecamines on cobalt and copper, official says

3/29/2024: Chile's Codelco posts 2023 profit dip as production falls

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.