The Base Metal Blues

The world’s eighth-largest aluminum maker, Alcoa, threw investors for a loop on Monday, unexpectedly announcing a new chief executive officer (CEO). 😮

Roy Harvey has led the company since November 2016, when it went public, and will remain a strategic adviser until the end of 2023. He’ll be replaced by William Oplinger, who has served as executive vice president and chief operations officer (COO) since February of this year.

Although the company says this reflects its “succession planning process,” the market seemingly did not expect a change. However, it’ll likely have to wait until the company reports third-quarter results in mid-October for more color on the change and potential impacts. 📝

$AA shares fell 6% on the day to fresh 2.5-year lows. It has now given back 70% of its October 2020 to March 2022 gains. 😬

Other companies in its space have not fared particularly well this year either. Although the commodity sector has performed well in aggregate, most of the strength has come from energy and agriculture. The chart below shows the base metals ETF lagging its peers year-to-date, falling nearly 5%. 📉

We’ll have to wait and see if things improve. However, the global economy slowing down will remain a headwind for the group, including copper, aluminum, and zinc. 🤷

Natural Gas Is Moving Fast

Okay, maybe not fast. But it certainly is moving differently than it has been. After falling about 80% from its highs from August to March, natural gas futures have been taking the first step to reverse their trend…stop going down. ⏸️

Below is a daily chart of natural gas futures trading in a $2.00 to $2.65 range for the last five months. But this week, traders are putting it back on their radar due to its strength relative to the rest of the energy commodity complex. With crude oil, gasoline, and heating oil all falling several percent this week, natural gas’s nearly 5% gain certainly stands out. 🤔

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A Crude Two Weeks For Energy

The recent carnage in the energy sector has been lost in the shuffle, so let’s take a quick look.

Below is a chart of crude oil’s weekly chart dating back three years. With this week’s decline, prices fell to their lowest level since December 2021. And the one-week rate of change shows this is the largest one-week decline since early 2020. 😬

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