Russian Aluminium Diversion & Rent-Share Agreements Drive LME Stock Increase


The London Metal Exchange-registered warehouses’ total aluminium stocks increased significantly, causing a 1.45% decrease in aluminium prices, which ultimately settled at 230.85. Daily LME data shows that accumulation of aluminium stocks surged by 88% to 903,850 metric tonnes, the highest level since January 2022.

The increase was ascribed to rent-share agreements, in which dealers divert Russian-made aluminium from storage facilities in order to profit from regulatory alterations.

Furthermore, the re-warranting of banned Russian aluminium for lease agreements in authorized warehouses partly contributed to the increase in aluminium LME stocks.

The fundamentals of the aluminium market held steady despite this upswing. And commodity giants are anticipat to reassert their metal holdings.

New restrictions on the sale of aluminium to consumers in the US and the UK. However, may have an effect on the supply of the market.

Amidst the disruptions caused by an explosion in a crucial fuel depository. China’s reliance on Guinea raised concerns regarding the security of its bauxite supply.

Concerns about supply were further heighten by the fact that Yunnan. The fourth-largest aluminum-producing region in China, maintained production curbs as a result of the yearly dry season.

Technically speaking, there was new selling pressure on the aluminium market as open interest increased by 6.28% and prices dropped by -3.4 rupees.

The aluminium price has key support levels at 228.8, with a possible downside test at 226.8 levels. On the other hand, resistance is expect at 234.6; a breakthrough there could result in additional price testing at 238.4.