Traders raid LME aluminium stockpiles as shortages loom

Almost 40 per cent of London Metal Exchange aluminium inventories have been cancelled, or earmarked for delivery out of approved warehouses, as industry sources say the metal could be shipped to countries left short by the closure of the Strait of Hormuz, reports Reuters.

A total of 98,150 tons of warranted aluminium - that available for delivery - was cancelled in warehouses in Port Klang, Malaysia on Monday, LME data shows.

It was not immediately clear which entity or entities had made the cancellation or why; the backwardation structure in the market typically attracts metal to the LME.

Worries about tighter supplies have created a backwardation, or premium along the aluminium contract maturity curve .

The premium for the cash LME aluminium contract over the three-month forward hit a high of $59 a metric ton on Monday, the most since February 2022 in the immediate aftermath of Russia's full-scale invasion of Ukraine. Total LME aluminium stocks are at 452,375 tons, the lowest since July - and 39.5 per cent of that volume has been marked for delivery out.