With a number of aluminium producers switching their value-added product production to primary aluminium and end-user demand increasingly weak due to Covid-19 shutdowns, storing metal on-warrant in LME warehouses has become a priority.
Participants also said banks are advising their customers to hold metal in safer locations because financing is harder to get. This means aluminium stockholders are moving their material back into LME warrantable locations from other areas in Asia.
“There is demand from everyone to store metal in LME-listed warehouses now. People need that backstop of being able to liquidate on the LME if they need to,” a trader said.
“People are trying to deliver in or move metal to certain warehouses but space is really, really hard to find. A few certain traders have squeezed a lot of space,” the same trader added.
Total LME aluminium stocks were over 1.3 million tonnes on Tuesday April 21, 21.3%...