Using implied volatility to evaluate price targets

The negotiation season for long-term contracts is well under way in many of the base metal markets, and participants globally have noted that the price volatility seen so far in 2022 and the soaring energy costs in Europe have weighed on consumer sentiment

The energy crisis roiling Europe as a result of Russia’s invasion of Ukraine is expected to last longer than the coming winter, although efforts to secure alternative supplies are expected to eventually prove fruitful

Aluminium premium offers reported to Fastmarkets in the United States rose in some instances and fell in others in a contradictory, initial reaction to news of a possible US ban on aluminium imports from Russia that broke last week

Premiums for copper cathode imported into China surged during the week to Friday October 14, following the country’s National Day holidays, reaching its highest recorded level since Fastmarkets started tracking the market in 2015

Primary foundry alloy (PFA) premiums in the US and European aluminium markets moved down in the month to Friday, October 14, amid weak spot purchasing and despite the US considering a ban on Russian aluminium

The European aluminium market is preparing for further volatility with uncertainty building over the future availability of Russian aluminium supply, market participants told Fastmarkets on Thursday, October 13

German copper producer Aurubis is implementing a premium of $228 per tonne for 2023 for its European clients, the company said on Thursday October 13 in a memo to customers seen by Fastmarkets

Chilean state-owned copper producer Codelco has made a premium offer in the low- to mid-$230s per tonne to its key European clients for 2023 supply, sources have told Fastmarkets

Sustainable sourcing of metals is one of the most talked about issues for markets in 2022, dominating the discussion at conferences and in many markets entering their annual contract negotiation seasons. Copper is no different