London Aluminum Market Experiences Record Supply Squeeze
· Business · LiveMint, Bloomberg
The London Metal Exchange is facing its most severe aluminum supply squeeze in decades, with spot prices trading $151 per ton above three-month futures. Inventories have dropped to their lowest levels since 1990, and exchange data indicates that two entities currently control between 60% and 80% of available stocks. This backwardation has forced traders to either buy back contracts or deliver metal, creating significant commercial pressure. While future shipments from Indonesia are expected to ease the surplus, current logistical disruptions in the Middle East continue to constrain supply.
Why it matters
The acute supply shortage creates extreme price volatility for industrial manufacturers who rely on aluminum, potentially increasing production costs for global goods.
Read the original report — LiveMint
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