Total LME aluminium stocks, now at 1,444,300 tonnes, are up by 53% from 942,125 tonnes on November 11, when sizeable deliveries first emerged in response to LME aluminium nearby spreads being in backwardation.
But while the benchmark cash/three-month spread was pushed back into a slim $5.25-per-tonne contango on December 11 from a $4.25-per-tonne backwardation on December 10, the contango has narrowed from $13.25-per-tonne on Monday to a lesser $8-per-tonne contango today.
This narrowing of spreads comes despite 70,900 tonnes of material delivered back onto the LME on Monday and today, though the backwardation in the cash-to-January spread has narrowed somewhat, from $7 per tonne yesterday to $4.25 per tonne today.
Additionally, 30,300 tonnes of material was freshly canceled as of 9am today, leaving on-warrant stocks at 1,321,200 tonnes compared with 1,309,000 tonnes on Monday. Of this 30,300 tonnes, 29,500 tonnes were freshly canceled in Port Klang following the 14,675 tonnes re-warranted in the region on Monday.
Meanwhile, the LME three-month aluminium price has weakened so far in Tuesday’s morning session, dipping a marginal 0.5% from yesterday’s close to trade around $1,768 per tonne, seemingly capped by weak demand, and sizeable stock deliveries.
Elsewhere, 6,090 tonnes of nickel was also put back into the LME warehousing system on Tuesday while a lesser 72 tonnes of material were re-warranted at the same time.
The contango in nickel’s cash/three-month spread has narrowed steadily, trading around $44.75 per tonne today from $61 per tonne on December 3 and a slight $5-per-tonne backwardation has opened up in the three-month/March spread.
The three-month nickel price has been capped accordingly, trading down by $5 per tonne from Monday’s close at $14,195 per tonne this morning.
- The US dollar index is trading up 0.04% at 97.21 this morning, exerting a slight dampening effect on already lackluster interest in the base metals.
- Copper was the only LME base metal in which inventory outflows exceeded inflows this morning despite a $7.50-per-tonne backwardation opening up in the cash-to-January spread. 5,950 tonnes of material left LME-approved global this morning versus a lesser 700-tonne inflow, leaving total stocks at 162,225 tonnes. 400 tonnes of material was freshly canceled at the same time.