LME aluminum inventory drops significantly, reaching its lowest level since May

On Tuesday, January 7th, according to foreign reports, data released by the London Metal Exchange (LME) showed a significant decline in available aluminum inventory in its registered warehouses. On Monday, LME’s aluminum inventory fell by 16% to 244225 tons, the lowest level since May, indicating that the tight supply situation in the aluminum market is intensifying.

Specifically, the warehouse in Port Klang, Malaysia has become the focus of this inventory change. The data shows that 45050 tons of aluminum were marked as ready for delivery from the warehouse, a process known as cancellation of warehouse receipts in the LME system. Cancelling the warehouse receipt does not mean that these aluminum have left the market, but rather indicates that they are being intentionally removed from the warehouse, ready for delivery or other purposes. However, this change still has a direct impact on the aluminum supply in the market, exacerbating the tight supply situation.

What is even more remarkable is that on Monday, the total amount of aluminum cancelled warehouse receipts in LME reached 380050 tons, accounting for 61% of the total inventory. The high proportion reflects that a large amount of aluminum inventory is being prepared to be removed from the market, further exacerbating the tight supply situation. The increase in cancelled warehouse receipts may reflect changes in market expectations for future aluminum demand or some judgment on the trend of aluminum prices. In this context, the upward pressure on aluminum prices may further increase.

Aluminum, as an important industrial raw material, is widely used in various fields such as aerospace, automotive manufacturing, construction, and packaging. Therefore, the decline in aluminum inventory may have an impact on multiple industries. On the one hand, tight supply may lead to an increase in aluminum prices, increasing the raw material costs of related industries; On the other hand, this may also stimulate more investors and producers to enter the market and seek more aluminum resources.

With the recovery of the global economy and the rapid development of the new energy industry, the demand for aluminum may continue to grow. Therefore, the tight supply situation in the aluminum market may continue for some time.