Russian Aluminium Stocks Swell In LME Warehouses As Traders And Buyers Find Alternative Supplies

Russian Aluminium Stocks Swell In LME Warehouses As Traders And Buyers Find Alternative Supplies

Stocks of Indian and Chinese aluminium in London Metal Exchange warehouses plummeted in June due to a rush by traders and consumers to fill the void left by Russian aluminium.

The fall off in Russian aluminium stocks in LME warehouses has been profound. In January, Indian-originated aluminium constituted over half of LME aluminium stocks. In June, Indian aluminium comprised only 18 percent of the total.

Stocks of Non-Russian copper in LME warehouses similarly plummeted in the year’s front half. On-warrant Chinese copper constituted 40 percent of LME stocks in May, falling to just 8 percent the following month.

The numbers, calculated by Reuters from LME data, are of on-warrant stock, which is metal that has yet to be purchased by a trader or consumer. A growing stock of Russian aluminium and other metals in LME warehouses suggests a growing trend away from buying Russian metals. As yet, Russia has not experienced formal sanctions on metals the LME trades in.

As of last month, on-warrant Russian aluminium in LME warehouses totaled 218,025 metric tons, which comprised 80 percent of the LME’s total. The share of Russian aluminium ballooned from 68 percent in May (263,125 metric tons) and 41 percent in January.

When asked for comment, the LME was circumspect.

“We closely monitor the levels and flow of Russian metal through our physical network.”

“We note that all metals of Russian origin continue to be consumed by a broad section of the market, and will remain vigilant in respect of this matter,” they continued.

Russian copper stocks doubled from May to June, making up fully two-thirds of LME’s total on-warrant supply. Similarly, the share of Russian nickel in LME warehouses rose by 2 percent in June, totaling 7,962 metric tons.

Russian metal sales continue to struggle as a result of international backlash from its invasion of Ukraine early last year.