Metals Update: Decline in LME Aluminium On-Warrant Stocks Signals Market Shift

Metals – LME aluminium on-warrant stocks decline

The LME copper cash/3-month spread eased slightly yesterday, falling back to a backwardation of $19/t after the LME reported an increase in on-warrant stocks. These inventories increased by 6,175 tonnes yesterday to 31,900 tonnes, while cancelled warrants fell by 9,225 tonnes to 45,150 tonnes.

Meanwhile, LME on-warrant aluminium stocks fell by 28,500 tonnes (the biggest daily decline since 2 June) to 258,875 tonnes yesterday. Cancelled warrants for aluminium also rose by 27,150 tonnes to 277,550 tonnes. The cash/3m spread did not react to changes in aluminium inventory numbers, although the flat price did settle more than 2% higher on the day. However, this was more likely on the back of hopes for more Chinese stimulus.