Core Viewpoint - Worthington Steel is prepared with alternative acquisition targets if the $2.4 billion deal to acquire Kloeckner & Co does not materialize, as stated by the company's CEO [1][2]. Group 1: Acquisition Plans - Worthington Steel has a deadline of March 12 to secure at least 65% of Kloeckner's shares to finalize the acquisition, having already obtained 53% from major shareholder Swoctem and other tenders [2]. - The CEO expressed high confidence in achieving the acquisition goal, indicating that Kloeckner was the most strategically beneficial option among around 10 potential targets [2][3]. Group 2: Industry Context - The North American metals trading sector is experiencing significant consolidation, highlighted by Ryerson's recent merger with Olympic Steel and Thyssenkrupp's plans to divest its materials trading division [4].

Group 1 - The London Metal Exchange (LME) reported a significant decline in three-month copper prices, dropping by 5.30% to $12,460.5 per ton [1] - Three-month tin prices on the LME fell by 10.97%, reaching $46,255.0 per ton [1] - The three-month nickel prices on the LME decreased by 7.85%, settling at $16,545.0 per ton [1]

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Core Viewpoint - The significant drop in LME copper prices is attributed to high inventory levels, leading industrial buyers to hesitate at elevated price points [1][3]. Group 1: Copper Market Analysis - On January 20, LME three-month copper prices fell by $212, or 1.64%, closing at $12,753.50 per ton after a previous day's increase of 1.3% [1][2]. - Over the past six months, LME copper prices surged by 30%, reaching a record high of $13,407 due to speculative buying amid concerns over potential supply disruptions [3]. - Copper inventories monitored by exchanges have reached an eight-year high, with Shanghai Futures Exchange warehouse stocks more than doubling since December 1 to 213,515 tons, and U.S. Comex warehouse stocks increasing by 127% to 542,914 short tons [3]. Group 2: Consumer Behavior and Market Sentiment - Chinese buyers are currently paying a spot price for copper that reflects a discount of 150 yuan per ton compared to Shanghai copper futures, a significant shift from a premium of 200 yuan on January 15, indicating a lack of interest in physical copper purchases [3]. - Despite the high demand for metals as hard assets in a world filled with uncertainties, gold is perceived as a safer investment, with its price surpassing $4,700 per ounce, setting a new record [3]. Group 3: Other Metals Performance - Other base metals on the LME also experienced significant declines, with three-month lead down by $32, or 1.55%, to $2,028.50 per ton, following a reported 11% increase in inventory within a single day [4]. - Three-month nickel prices dropped by $519, or 2.86%, to $17,614.00 per ton, amid concerns that mining quotas may not meet smelter demands for the year [5]. - Three-month aluminum prices fell by $51, or 1.61%, closing at $3,107.50 per ton [6]. - Three-month zinc prices decreased by $48.5, or 1.51%, to $3,173.00 per ton [7]. - In contrast, three-month tin prices rose by $154, or 0.31%, to $49,412.00 per ton [8].

Group 1 - The LME copper inventory decreased by 500 J to 141,125 J, reflecting a change of -0.35% [1][5] - The LME aluminum inventory decreased by 2,000 J to 490,000 J, showing a change of -0.41% [1][6] - The LME zinc inventory decreased by 25 T to 106,700 T, indicating a change of -0.02% [1][10] Group 2 - The registered warehouse stocks for copper increased by 0.44% to 91,025, while the canceled warehouse stocks decreased by 1.76% to 50,100, resulting in a cancellation ratio of 35.50% [3] - The registered warehouse stocks for aluminum remained unchanged at 446,575, while the canceled warehouse stocks decreased by 4.40% to 43,425, leading to a cancellation ratio of 8.86% [3] - The registered warehouse stocks for zinc decreased by 0.26% to 98,125, while the canceled warehouse stocks decreased by 3.11% to 8,575, resulting in a cancellation ratio of 8.04% [3]

Group 1 - The overall inventory levels for various metals have shown fluctuations, with copper decreasing by 1,750 tons (-1.26%) to 137,225 tons, while aluminum decreased by 2,000 tons (-0.40%) to 495,825 tons [1][4] - Tin inventory increased significantly by 490 tons (+9.05%) to 5,905 tons, indicating a positive trend in this metal's stock [1][11] - The registered warehouse stocks for copper are at 115,150 tons, with a decrease of 0.17%, while the canceled warehouse stocks decreased by 6.56% to 22,075 tons, resulting in a cancellation ratio of 16.09% [2][4] Group 2 - Aluminum registered warehouse stocks are at 446,050 tons, remaining unchanged, while canceled stocks decreased by 3.86% to 49,775 tons, leading to a cancellation ratio of 10.04% [2][5] - Zinc inventory decreased by 650 tons to 106,800 tons, with registered stocks at 98,750 tons and canceled stocks at 8,050 tons, resulting in a cancellation ratio of 7.54% [9] - The tin inventory's registered stocks increased by 9.45% to 5,790 tons, while canceled stocks decreased by 8.00% to 115 tons, leading to a cancellation ratio of 1.95% [2][11]

Core Insights - Traders are making record investments in China's metals markets, anticipating a continued rise in base metals and lithium prices [1][2] - Factors such as tightening global metal supply, lower interest rates, and strong industrial demand are driving these investments [2][6] Group 1: Market Activity - Speculators held record-high open interest in base metals like copper, zinc, nickel, tin, lead, and aluminum on the Shanghai Futures Exchange at the end of 2025 and start of 2026 [1] - Trading values for the six base metals on the Shanghai Futures Exchange increased by over 260% year-on-year [2] - In December 2025, the turnover for trades in base metals, gold, and silver reached 37.1 trillion Chinese yuan, equivalent to $5.3 trillion [3] Group 2: Lithium Market - Open interest and trading volume in lithium on the Guangzhou Futures Exchange reached all-time highs in November 2025, despite a decline in December due to increased fees and position caps [4] - Speculators continue to show strong interest in lithium as a key battery and energy transition metal [4] Group 3: Future Outlook - Analysts predict that trading volumes and open interest in Chinese metals markets will remain high in 2026, with most base metals expected to be well-supported [5] - Uncertainty regarding U.S. tariffs and tighter markets due to supply disruptions are expected to further boost metals markets this year [6] - The global aluminum market is anticipated to be tight as China nears its production cap and other producers consider closures due to high energy costs [6]

Group 1 - LME metal futures experienced a broad rebound, with tin leading the gains, reaching the highest level since early March 2022 [1] - As of the close, copper was priced at $12,965.5, up $263.5, a rise of 2.07% [1] - Aluminum closed at $3,149, increasing by $61, reflecting a 1.98% gain [1] - Zinc was priced at $3,149, up $18, marking a 0.57% increase [1] - Lead closed at $2,046.5, rising by $30, which is a 1.49% increase [1] - Tin reached $45,700, up $2,025, showing a significant rise of 4.64% [1] - Nickel was priced at $17,700, increasing by $635, a rise of 3.72% [1]

Core Viewpoint - The recent selloff in metals has significantly impacted some of the most profitable trades of the year, indicating a shift in market dynamics and investor sentiment [1] Group 1: Market Impact - The selloff has led to a decline in prices for key metals, affecting both producers and investors who had heavily bet on rising prices [1] - Analysts note that this downturn could signal a broader market correction, as previously high-performing trades are now under pressure [1] Group 2: Investor Sentiment - Investor confidence has been shaken, with many reassessing their positions in the metals market following the recent price drops [1] - The shift in sentiment is reflected in trading volumes, which have decreased as investors become more cautious [1]

Core Insights - S&P Global Energy celebrates the 10-year anniversary of its Platts steel scrap and rebar price benchmarks being used as settlement references for London Metals Exchange futures contracts [1] - The popularity of these contracts indicates a growing demand for risk management solutions in the recycled steel market [1] Industry Overview - S&P Global Energy is recognized as the leading independent provider of information, data, analysis, and benchmark prices across various markets including energy, petrochemicals, metals, shipping, and commodities [1] - The London Metals Exchange launched steel scrap and steel rebar futures contracts on November 23, 2015, with settlements based on the Platts benchmarks [1] Benchmark Details - The Platts benchmark for steel scrap is known as Platts HMS 1/2 80:20 CFR Turkey, which is based on spot physical premium steel scrap delivered to Turkey on a cost and freight basis [1] - The Platts benchmark for steel rebar is referred to as Platts Steel Rebar free-on-board (FOB) Turkey [1]