LME Warehouses Reported 20% Surge in Aluminum Inventories
The global aluminium markets are reportedly in huge surpluses, trade experts noted.
SEATTLE (Scrap Monster): The aluminium inventories at the London Metal Exchange (LME) totalled 1.15 million metric tons as of March 30, 2020. This is significantly higher by almost 20% when matched with the levels two weeks prior to that. Meantime, the inventories at Shanghai Futures Exchange (SHFE) warehouses, at 530,000 metric tons, were higher by almost 180% from the start of the current year. It must be noted that the warehouse stock at the beginning of 2020 was 190,000 metric tons.
The rise in inventory levels is despite cutbacks in meltshop production by aluminium producers across the world, especially in North America and European region, mainly due to temporary shutdown of automotive plants. The ramp up in inventory suggests that the cutback in production has not been adequate to match the tremendous decline in demand.
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The oversupply of the metal was further exacerbated by Chinese aluminium plants, which have mostly remained online even during these difficult times. The global aluminium markets are reportedly in huge surpluses, trade experts noted.
Meantime, several recycled-content aluminium producers, including Norsk Hyro have announced closure of extrusion plants. Also, companies, including Aleris, Audubon Metals, Real Alloy, Spectro Alloys and Superior Aluminum, have already announced cutback in production.
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