- LME Aluminum Select 3M Select trades $27 higher at $2,677/mt (9:40 AM CDT)
- Goldman Sachs has raised its aluminum price forecast, citing concerns over an inventory shortage and predicting prices on the LME could rise to $4,500 per metric ton in 2024 and $5,000 in 2025. This comes as the investment bank anticipates a tightening market with demand outpacing supply, driven by the global transition to renewable energy and electric vehicles. Goldman highlighted that the impact of China's economic growth on metal prices is more pronounced than on oil and coal due to China's significant role in global metals demand. Australia's government, a major exporter and the top bauxite producer, echoed these concerns earlier this month, emphasizing the need to avoid a repeat of the nickel shortage crisis.
- LME Copper 3M Select trades $67 higher at $9,574/mt
- China's copper demand is expected to peak around 2030, according to state-backed researcher Antaike, as demand growth slows due to a cooling economy and a shift toward alternative materials like aluminum. While there will be substantial growth from renewables, the copper intensity of these investments is decreasing as industries seek to reduce usage. Demand growth is forecast to average 1.1% annually from 2025 to 2030, down from 3.9% in the previous five years. Key risks to this outlook include changes in China’s manufacturing export strength or factory relocations. Copper consumption from electric vehicles and renewables is projected to rise to 3.1 million tons by 2030, constituting 26% of total demand, up from 15% in 2023. (Bloomberg)
- CME HRC Steel last traded at $704/st, prices are unchanged from yesterday’s settle
- China’s major steel industry group, the China Iron & Steel Association (CISA), has urged mills to exercise restraint in production despite a recent price rally fueled by government stimulus. The group emphasized that there haven't been significant changes in orders, and any price increases do not indicate a shift from the current oversupply dynamic. China’s steel sector, impacted by a sluggish property market and slowing infrastructure projects, has seen output decline recently, a trend CISA hopes will continue. The association foresees a gradual reduction in annual steel production to 800 million tons by 2035, down from over 1 billion tons in recent years. (Bloomberg)
- Goldman Sachs has called recent gains in iron ore prices excessive, suggesting the metal needs to fall below $90 per ton to balance the market due to high inventories, strong supply, and a decline in China’s construction sector. Analysts, including Daan Struyven, argue that China's stimulus policies, which focus on clearing property inventories rather than spurring new construction, won't boost steel demand significantly. Additionally, infrastructure spending is leaning towards less steel-intensive projects. While iron ore’s rise has been driven by speculative positioning, the bank sees a more substantial boost to base metals, raising its 2025 average price forecasts for aluminum and copper to $2,700 and $10,160 per ton, respectively. (Bloomberg)
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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.
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