May 17, 2024

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• LME Aluminum 3M Select is up $5.5/mt, bouncing slightly.
  • Last trade was $2,593.5/mt (6:45 AM CST)
  • Since Wednesday, over 340,000 mt of aluminum warrants have been canceled, continuing the saga inside LME’s Malaysian warehouses. On Wednesday, Thursday, and Friday, canceled warrants (meaning the metal is set for delivery) from LME Malaysian warehouses spiked by 99,900 mt, 182,350 mt, and 60,000 mt, respectively. The total volume of on-warrant inventories (meaning the metal is available to trade) in Malaysian warehouses now stands at 426,900 mt. This is down from 709,250 mt on Tuesday after the huge inflow of likely Indian aluminum occurred. It is unclear if the newly canceled warrants will be re-delivered at a later date or if the metal will be removed from the warehouses. (Source: LME)
• LME Copper 3M Select is up $122/mt, trading near new highs for the week.
  • Last trade was $10,493.5/mt (6:45 AM CST)
  • The copper markets have also been a source of drama this week. The spread between the CME and LME copper contracts usually trades within a relatively tight range, but a so-called short squeeze on the CME led to a historic blowout of this spread. This “short-squeeze” stems from trading houses and speculators that were short CME copper and were ultimately forced out of their positions amid rising prices and potential margin calls. On Tuesday, the spread between the prompt month CME contract and LME Cash settled at an astounding $912/mt, but temperament has cooled since then. (Sources: CME, LME)
• Prompt month CME HRC Steel last settled at $786/st (6:45 AM CST).
• Earlier this week, a top US official accused China’s CMOC produced a “glut” of cobalt that has suppressed prices in recent years. According to data from the Cobalt Institute, CMOC produced about 25% of the world's cobalt output last year. With demand suppressed, prompt-month CME Cobalt prices currently hover near three-year lows. If you have exposure to the cobalt market, please get in touch with AEGIS for strategies.

Price Indications

Today's Charts

AEGIS Insights

5/15/2024: AEGIS Factor Matrices: Most important variables affecting metals prices

5/2/2024: Important US Economic Data (AEGIS Reference)

4/25/2024: Mexico's New Tariffs on Steel and Aluminum Imports Create Uncertainty in US Markets

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

5/15/2024: Trafigura, IXM caught in COMEX copper short squeeze as prices hit record

5/14/2024: Anglo breakup gives investors a free option on M&A

5/14/2024: Biden's new China tariff wall faces leakage via Mexico, Vietnam

5/14/2024: Biden sharply hikes US tariffs on an array of Chinese imports

5/13/2024: Weaker supply will drive the platinum deficit higher than expected in 2024, WPIC says

5/13/2024: How hard will new US tariffs hit China EVs and other exports?

5/13/2024: France backs nickel refinery project to bolster battery supply chain

5/13/2024: BHP says Anglo American rejected $42.7-billion revised proposal

5/13/2024: India's Jindal Steel posts Q4 profit jump as costs ease

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.