It is stated that the amount of aluminum in the warehouses of the London Metal Exchange has decreased to record low levels, and despite the latest developments regarding supply problems, this situation is not enough to break the downtrend on the metal markets.
The record low in 2000 was broken as LME contracted aluminum stocks fell 9.7 percent to 260,275 tons. A series of supply cutbacks is pushing the market into a deepening deficit, as its stocks are down 63 percent this year, heading for a record year-on-year decline.
Despite the melting stocks, aluminum prices gave back the gains they made at the beginning of the year and pointed out that the attention of investors continues to be on the risks related to demand.
The atmosphere in the metals markets has changed dramatically over the past few weeks as concerns about continued tight supplies have been replaced by concerns about the state of the global economy, with the expectation that the Covid-19 restrictions will hit demand in China, the largest metal consumer. Aluminum tumbled 33 percent from a record high in March, giving back gains it had earlier.
“There was a rapid rally in aluminum, now we are witnessing a very strong correction,” said Geordie Wilkes, Head of Research at Sucden Financial.
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