According to foreign news on February 24, data released by the London Metal Exchange (LME) on Monday showed that one party has controlled up to 90% of the available aluminum inventory, valued at 500 million US dollars.
The exchange does not disclose the identities of the parties holding large positions, but investors or traders usually hold inventory in the hope of profiting from market shortages or to fulfill commitments to customers.
Senior base metals strategist at broker Marex, Alastair Munro, said: "We can reasonably assume that it must be a spot trader looking for metal to fill the spot gap."
Munro added that this seems to be reflected in the recent large number of new cancellations of LME inventory - 32,175 tons were cancelled within a week.
LME position data shows that as of February 20, 80%-90% of LME aluminum and zinc inventory was held by one party.
The exchange said in an email: "LME is closely monitoring the tension in these markets and has taken necessary control measures to ensure the continued orderliness of the market."
LME is owned by the Hong Kong Stock Exchange.
Data released by LME on Monday showed that LME aluminum inventory was 535,900 tons, but the registered warehouse receipt volume of LME aluminum was 208,400 tons.
Based on the LME spot price, 90% of these available aluminum inventories are valued at 505 million US dollars.
After the European Union decided to ban the import of primary aluminum from Russia, LME three-month aluminum futures hit a nearly nine-month high of $2,736 per ton last Friday.
Since May last year, LME's overall inventory has been halved, indicating a tightening of the aluminum market.
This is reflected in the premium of LME spot aluminum over the benchmark three-month futures contract. On February 17, the premium soared to $38 per ton, the highest since May 2023 based on closing levels.
Spot premiums usually indicate a short-term shortage of LME aluminum inventory.
The value of zinc inventory held by a single party is about 370 million US dollars, but the LME zinc price difference does not show a premium for spot delivery.
Despite a significant decline in LME zinc inventory, mine supply is expected to recover, and analysts predict a global surplus this year.
