Aluminium stocks at Japan’s major ports rise in October

Aluminium ingot inventories at three major Japanese ports rose about 8% month-on-month in October, trading house Marubeni Corp’s data showed on Wednesday November 13.

The total inventories at Osaka, Yokohama and Nagoya stood at 261,600 tonnes in October, up from 242,300 tonnes in September. Inventories were up 1.5% year-on-year.

“Stock volumes at Nagoya increased a little,” a trader source from Tokyo said.

“[More] cargoes arrived at Nagoya than usual and delivery out from the port was less than usual,” he said, adding that the domestic and international markets for aluminium remained very quiet.

Nagoya stocks rose 15.6% month-on-month in October to 135,500 tonnes.

At Yokohama, total stocks rose by almost 1% in October to 110,100 tonnes while inventories at Osaka were steady at 16,000 tonnes.

Total aluminium ingot inventories at the three major Japanese ports saw record-high levels of 315,500 tonnes at the end of January.

Premiums

Buyers and sellers will be starting their annual mating season at the end of this month, and are taking a wait-and-see approach to what the numbers will be and what the effects of the London Metal Exchange’s latest warehousing decision will be.

The LME has shortened the limit on the length of queues it will permit at individual warehouse locations to 50 days, down from the 100-day limit it proposed in July.

“There has been no big impact on premiums and people are trying to digest it,” a trader in Singapore said.

“The LME rule change has had no direct impact in Asia as the queues in Singapore and Johor are smaller in comparison to those in warehouses in Europe and the USA,” the trader from Tokyo said.

“At this moment there has been no big change in premiums,” a second trader from Tokyo said.

He recently concluded deals for small quantities in the $240-250 per tonne range, he said.

“The aluminium price and premium will now be more fundamentally dependent,” a third trader from Japan said.

“I think the premium will go down a little bit in 2014,” the trader added.

Metal Bulletin’s spot MJP cif premiums were around $240-250 per tonne narrowing from an earlier range of $235-265 per tonne.

“A few weeks back there were some rumours of high numbers in Japan as some players had difficulty in covering some long-term commitments after the Alcoa potline news,” another Asian trading source said.

“The numbers were high but no business was done at those numbers,” he added.

Metal Bulletin’s Shanghai cif premiums were at $220-250 per tonne.

“The demand for aluminium is ok in China, and with the LME rule change we expect more aluminium stock coming out of the LME warehouses,” a trader in Shanghai said.

“But the liquidity is not good and we have not done anything in aluminium recently,” he said.

Elsewhere in Asia premiums remain unchanged.

Aluminium premiums in Singapore and Johor were at $180-190 per tonne.