Reuters Africa
Aluminium inflows rise on dollar crunch, poor demand
Edited by : AL CIRCLE
1 min read
Large shipments of aluminium are expected to arrive into London Metal Exchange (LME) warehouses in December as a souring economic outlook crimps demand and a European dollar crunch intensifies the need for cash ahead of the year end.
Producer metal has become more freely available as consumers have deferred 2012 orders due to Europe's deteriorating outlook, metals industry sources said.
Chinese demand has been cut by a slowdown hitting its export markets and traders say a squeeze on dollar funding in Europe has also raised the prospects that metals financing deals, at least at the margin, may not be renewed or may come undone.
"I have heard the inflow is six digits," said one physical trader based in London, referring to the amount of aluminium in tonnes expected to enter LME warehouses.
Aluminium metal is more easily monetised once it enters the LME system when a paper title or warrant to the metal is issued. These are highly liquid and can quickly be converted to cash.
Producer metal has become more freely available as consumers have deferred 2012 orders due to Europe's deteriorating outlook, metals industry sources said.
Chinese demand has been cut by a slowdown hitting its export markets and traders say a squeeze on dollar funding in Europe has also raised the prospects that metals financing deals, at least at the margin, may not be renewed or may come undone.
"I have heard the inflow is six digits," said one physical trader based in London, referring to the amount of aluminium in tonnes expected to enter LME warehouses.
Aluminium metal is more easily monetised once it enters the LME system when a paper title or warrant to the metal is issued. These are highly liquid and can quickly be converted to cash.
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