AEGIS Hedging - Metals First Look
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Note: Clients with AEGIS Platform access can see this and other research, plus hedge portfolio reporting and tools here.
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LME Aluminum 3M Select trades $-33 lower to $3248 at 8:31:28 AM
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LME Copper 3M Select trades $-32.25 lower to $14241 at 8:31:27 AM
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(Bloomberg) – Copper fell to the lowest in more than a week, dropping with other metals, as resurgent oil prices fanned concerns about prospects for the world economy. Copper, which posted a record close last week, retreated as much as 1.3% in London. Crude oil traded near the highest close in five weeks as fighting between the US and Iran over control of the Strait of Hormuz intensified, renewing the threat to energy exports from the Middle East. Industrial metals posted notable gains in August, with copper gaining almost 4%, supported by tight supplies. Still, a hawkish speech by Federal Reserve Chair Kevin Warsh last Friday, coupled with fresh violence between the US and Iran, have fueled bets that the Fed will need to hike interest rates to fight inflation. That could slow economic growth, crimping industrial commodity demand.
“Higher oil prices are strengthening inflation expectations and copper prices are under pressure,” Guangzhou Futures Co. wrote in a note. “Overall fundamentals remain strong, but macro uncertainty will continue to contain any upside.” Short-term availability of copper on the LME remained tight this week, with spot prices trading more than $100 above the benchmark contract for delivery in three months. That’s lower than the ultra-wide spreads seen in recent weeks, but still an unusually high premium for spot metal — indicating that the LME market hasn’t yet fully recovered from a huge outflow of metal to the US, sent in anticipation of possible import tariffs. The spreads show that near-term supplies “remain tight, but the reduced backwardation and weaker macro environment suggest prompt pressure is providing less support to the outright price,” analysts at Sucden Financial Ltd. wrote in a note.
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CME HRC Steel last traded at $1221 and $9 higher at 8:26:18 AM
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Price Indications
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Today's Charts
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Metals Factor Matrix
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AEGIS Factor Matrices: Most important variables affecting metals prices
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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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