MI ANALYSIS: Global reported aluminium inventories down by 70,000t in Sep

Global reported stocks of aluminium—those held by the three big exchanges, those at Japanese ports and producer stocks—fell by a cumulative 69,885t during September, which was in line with seasonal patterns but lower than the declines of 161,000t seen in September last year and of 145,000t seen in September 2004.
The fall in visible inventories last month was the fourth consecutive one and the year-to-date movement now stands at a net decline of 291,948t.

Producer Stocks Down

The International Aluminium Institute (IAI) reported this morning a 14,000t decline in producer stocks of unwrought metal to 1.6 million tonnes. That followed two months of small rises and again is perfectly in line with the usual consumer re-stocking that follows the summer holiday months in much of the northern hemisphere.

However, in keeping with the overall global stocks movement, the fall in producer stocks in September was muted by comparison with the 135,000t and 52,000t declines seen in 2005 and 2004 respectively.
Month-on-month most of the IAI’s major geographical regions saw declines in producer inventory with the exception of Africa, where they rose by 11,000t, and Latin America, where they were up by 2,000t.
However, the year-to-date decline of 197,000t is much higher than the 11,000t cumulative change over the first nine months of 2005.

The key factor in lower stocks this year has been Western Europe, where producer stocks have fallen by 173,000t. They are also 181,000t lower than this time last year, again the key influence in the overall 177,000t year-on-year decline.

Across The Board

September was the only month so far in 2006 when every component of the global stocks picture fell month-on-month.

The biggest falls came on the London Metal Exchange, where stocks fell by 25,775t, and at Japanese ports, where they were down by 25,300t from the end of August.

The overall 292,000t decline seen this year is broadly consistent with most analysts’ estimates the market for primary metal is going to be in deficit for 2006, although the cumulative drawdown in visible inventory may be slightly over-stating the size of that deficit.

The World Bureau of Metal Statistics last week said it estimated the production-consumption deficit totalled 261,00t over the first eight months of the year.