March 10 (Reuters) - Almost 40% of London Metal Exchange aluminium inventories have been cancelled, or earmarked for delivery out of approved warehouses, as industry sources say the metal could be
Traders Raid LME Aluminium Stockpiles Amid Global Supply Shortages
Aluminium Inventory Movements and Market Impacts
March 10 (Reuters) - Almost 40% of London Metal Exchange aluminium inventories have been cancelled, or earmarked for delivery out of approved warehouses, as industry sources say the metal could be shipped to countries left short by the closure of the Strait of Hormuz.
Significant Cancellations in LME Warehouses
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Port Klang, Malaysia Activity
A total of 98,150 tons of warranted aluminium - that available for delivery - was cancelled in warehouses in Port Klang, Malaysia on Monday, LME data shows.
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Unclear Motivations Behind Cancellations
It was not immediately clear which entity or entities had made the cancellation or why; the backwardation structure in the market typically attracts metal to the LME.
Market Reactions and Price Movements
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Backwardation and Premiums
Worries about tighter supplies have created a backwardation, or premium along the aluminium contract maturity curve.
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Cash Contract Premiums
The premium for the cash LME aluminium contract over the three-month forward hit a high of $59 a metric ton on Monday, the most since February 2022 in the immediate aftermath of Russia's full-scale invasion of Ukraine.
Stock Levels and Regional Impacts
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Current LME Aluminium Stocks
Total LME aluminium stocks are at 452,375 tons, the lowest since July - and 39.5% of that volume has been marked for delivery out.
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Recent Cancellations in Port Klang
More than 45,000 tons of aluminium were cancelled in LME warehouses in Port Klang last week.
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Middle East Supply Disruptions
Force Majeure Declarations
Gulf smelters Qatalum and Aluminium Bahrain have already declared force majeure to customers as they are unable to ship due to the conflict in the Middle East.
(Reporting by Tom Daly; Editing by Chizu Nomiyama )
