LME, SHFE Data Indicates Rapid Decline in Global Aluminum Inventory

SEATTLE (Scrap Monster): Global aluminum inventories are rapidly declining, according to the most recent inventory data published by the Shanghai Futures Exchange (SHFE) and London Metal Exchange (LME). Because of the increased market demand for aluminum, this could lead to a further increase in the metal's price.

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On May 23, 2024, the LME's aluminum inventory reached its highest level in nearly two years. Nevertheless, inventory levels have been declining ever since they were unable to sustain these levels. Over the past few weeks, the inventory has drastically decreased. At 736,200 tons, the inventory is at its lowest point in almost six months. The sharp decline in inventory points to a robust recovery in metal demand.

The first week of November saw a marginal 2.95% drop in inventory levels to 274,921 tons, the lowest level in three months, according to the recently released Shanghai aluminum inventory statistics. The SHFE data emphasizes how China affects aluminum pricing worldwide.

The supply side of the market is still under pressure. While production prices are still rising, the expansion in aluminum output worldwide has halted recently. Aluminum production and supply have also been constrained by stricter environmental regulations.