Risk-off traders push LME aluminium stocks up by 16%; new concerns about warehouse space

Aluminium stocks on the London Metal Exchange have risen by 16% over the past week, with market participants taking a risk-off approach due to weak physical demand and concerns about the coronavirus outbreak.

On-warrant aluminium stocks on the LME now sit at 929,675 tonnes, up from 798,200 tonnes at this time last week. More than 120,000 tonnes were delivered between March 19 and March 24.
The majority of deliveries in have been into Port Klang and Singapore where good rent deals are available at warehouses. 
"This is the fear factor kicking in. People panic that they might not be able to warrant their material if stuff gets worse so they are rushing to put it in now," a European trader said.
The 2019-nCoV coronavirus pandemic has caused disruption to supply chains and logistics, leading to a series of plant closures among aluminium end-users.

"If the market plunges further, you don't want to be stuck with 50,000 tonnes [of metal] off-exchange. It is not worth the risk right now and banks would not let you take that risk," a...

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