Trafigura Delivered A Heap Of Aluminum To LME Warehouses

Swiss commodity giant Trafigura isn’t simply shuffling metal for appearances’ sake.

SEATTLE (Scrap Monster): What’s going on here?

Trafigura just dropped 100,000 extra tons of aluminum into London Metal Exchange warehouses at Port Klang, Malaysia—boosting local stockpiles by nearly 40% in a single day.

What does this mean?

Swiss commodity giant Trafigura isn’t simply shuffling metal for appearances’ sake. By delivering such a huge batch to LME-approved storage, the firm is capitalizing on lucrative financial plays—think daily warehouse rent and exchange-driven incentives. Aluminum stored on LME warrant in Port Klang earns 56 cents per ton each day, so Trafigura could be raking in about $56,000 daily just from this move. LME rules allow warehouse operators to charge rent for up to 80 days while shipments wait, which multiplies those returns further. These math-heavy deals only pay off if storing the metal is more profitable than selling it straight to manufacturers, so Trafigura’s delivery suggests the current incentives are outpacing spot market profits.

Why should I care?

For markets: Warehouse deliveries change the game.

A sudden 100,000-ton addition has swollen LME aluminum stocks, sending Port Klang’s total to nearly 367,000 tons—the highest in years. Strategic moves like this can influence short-term supply, pressure spot premiums, and drive the next play for traders worldwide. With more aluminum parked in warehouses, supply tightness may ease a bit, though extra inventory can sometimes drag prices down.

The bigger picture: Financial tactics redefine metals trading.

Moves like Trafigura’s show how major trading houses find value beyond simple buying and selling. Shifting metal around to capture storage incentives and play the warrant game is becoming a bigger part of the market. For manufacturers and buyers, these strategies can make raw materials more unpredictable—and add a fresh layer of volatility to long-term contract pricing.

 Courtesy: www.finimize.com