LME aluminium inventories reach one-month high citing South Korean stock inflows

According to data from the London Metal Exchange, inventories of aluminium in registered warehouses have increased to their highest level in over a month. This is due to the inflow of 38,725 tonnes into South Korea, presently stored at the Gwangyang port.

As a result, the overall LME inventories have risen by 8 per cent to 529,775 tonnes, the highest since July 12. The increase in inventories suggests that there is a surplus of metal in the market.

Additionally, investors are concerned about the weak demand for industrial metals in China, particularly in relation to the struggles in the property sector and weak factory activity.

Meanwhile, aluminium output has been increasing in China, the world's top non-ferrous metal producer.

In July, smelters in the southwestern province of Yunnan increased their production as the hydropower supply improved. Despite this, the benchmark LME three-month aluminium price has fallen 9 per cent this year, currently at US$2,162 a tonne.

Also, in the same month, aluminium stocks of Russian origin in LME depots accounted for 81 per cent of the total available to the market, according to a monthly LME report.

Investors have been monitoring LME inventory levels, particularly as a high proportion of Russian aluminium is held in the exchange's warehouses. Although these consumers are not directly targeted by Western sanctions imposed on Moscow, some are opting to shun metal from the country.