5/24/2023 0 Comments Fenetre en alu![]() ![]() The report captures metal that is being stored under an agreement requiring the use of LME-registered warehouses, or an agreement explicitly providing for potential future LME warranting. ![]() It’s important to understand what the LME’s “off-warrant” monthly report, released with a one-month time-lag, can and can’t throw light on. There is undoubtedly much more metal sitting in the deeper storage shadows but tracking these LME twilight stocks offers some important clues to current market dynamics. The inventory picture is still far from complete. Total LME aluminium stocks, registered and shadow, surged by 1.12 million tonnes over the same period, which seems a more accurate inventory reflection of last year’s turmoil. The amount of aluminium sitting in this LME twilight zone grew by 829,000 tonnes between February and November, by which stage shadow inventory of 1.66 million tonnes exceeded visible exchange stocks of 1.37 million. Happily, we now get to see some of it thanks to the LME’s “off-warrant” stocks reporting initiative. Rather, surplus metal is being stored in the off-exchange statistical shadows. There has been no pressing need for the physical supply chain to deliver unsold metal to the market of last resort. The last time metals demand suffered a similar collapse was during the Global Financial Crisis of 2009, when LME aluminium stocks almost doubled to 4.6 million tonnes. This is a surprising outcome, given the size of the COVID-19 hit to global manufacturing activity. A worker walks through an aluminium ingots depot in Wuxi, Jiangsu province September 26, 2012.
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