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 $-15.75 lower to $3237.5 at 8:40:20 AM
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LME Copper 3M Select trades $-240.5 lower to $14002 at 8:40:20 AM
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(Bloomberg) – Copper fell towards $14,000 a ton as traders ramped up wagers on a US rate hike and price spreads loosened after fresh deliveries of metal into exchange warehouses.Three-month futures dropped as much as 1.6% to $14,018.50 a ton, the lowest in over three weeks, after data from the London Metal Exchange showed an 8,425-ton rise in copper inventories in its warehouse network. Key price spreads also pointed to loosening supply conditions in the LME’s warehouse network on Monday, with cash contracts trading at a $45-a-ton discount to three-month futures after inventories rose. That’s a stark reversal from August, when the spread reached a $545-a-ton premium, in a condition known as backwardation that signals tight supply. Copper and other metals are also facing broader pressures as traders ramp up wagers that the Federal Reserve will soon start raising interest rates. Five of the LME’s six main metal contracts traded lower on Monday, hit by a strengthening dollar and a downbeat mood for risk assets.
“With speculative length reduced but prompt tightness also easing, copper is likely to remain choppy around current levels until stronger dip-buying returns or a fresh macro or fundamental catalyst provides clearer direction,” analysts at Sucden Financial Ltd. wrote in a note. Bets on rate hikes are rising ahead of the Fed’s policy meeting this week, with Friday’s stronger-than expected inflation print underscoring growing price pressures. Tighter monetary policy is typically a headwind for industrial metals like copper, raising borrowing costs for manufacturers and consumers.
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CME HRC Steel last traded at $1234 and $0 lower at 2:24:19 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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