Aluminium prices on the London Metal Exchange remain at historically low levels despite low stock levels, high premiums and sustained elevated raw materials costs.
The LME aluminium three-month price has failed to trade over $2,000 per tonne since 2018 and closed at just $1,775 per tonne on Wednesday September 4. Yesterday's close price was 9% lower than the 2019 high of $1,951 per tonne from March this year. This is despite available stocks being close to a decade low. Just 706,675 tonne of aluminium inventory remains on-warrant in LME-listed warehouses, significantly lower than the 1,060,275 tonnes on January 15. "The stocks have continued to dwindle but the price direction has moved in an opposite way - it is completely disconnected," a LME floor trader said. "The stocks and price movements should be in tandem but this year it that has broken. On-warrant aluminium stocks have not been over a million tonnes since January," he added. The underlying fundamentals of the aluminium market, especially the stock picture, remain supportive but LME prices continue to ignore...