Russian aluminium stocks on LME fall to 42% in May; Indian stocks soar to 50%

In a notable shift within the global aluminium market, the share of available aluminium stocks of Russian origin in London Metal Exchange (LME) warehouses experienced a dramatic decline, dropping to 42 per cent in May'24 from a dominant 89 per cent in April. Concurrently, aluminium stocks of Indian origin surged to occupy 50 per cent of the stocks, a significant rise from the previous 9 per cent, according to the latest LME data released on June 10, 2024 and published by Reuters.

This substantial redistribution in aluminium stock origins underscores the evolving dynamics of global metal trade, potentially influenced by geopolitical factors and shifting economic alliances. The marked decrease in Russian aluminium's presence could indicate broader market adjustments or regulatory impacts, while India's increased share highlights the country's expanding role in the global aluminium supply chain.

There has been a significant shift in stock levels following the LME's decision to prohibit all Russian aluminium, copper, and nickel produced from April 13 in compliance with USA and UK sanctions over the Russia-Ukraine geopolitical crisis.

The on-warrant aluminium stocks of all origins in LME-registered warehouses quadrupled in May, with the latest data indicating that the lion's share of this increase was from India, a significant player in the market. Specifically, Russian primary aluminium stocks on LME warrant—documents that confer ownership—rose to 246,950 tonnes last month, up from 116,325 tonnes in April. Meanwhile, Indian-origin stocks surged to 293,325 tonnes from 12,275 tonnes, underlining India's growing influence in the industry.

In May, a significant increase in aluminium inventories was observed in the LME-registered warehouses located in Port Klang, Malaysia. According to sources, this surge was primarily driven by profitable financial arrangements orchestrated by trading houses and warehouse operators.

The LME's data for May indicated that nearly all Russian aluminium, as well as all Russian copper and nickel, was held in its system under Type 1 warrants issued on or before April 12.

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