Aluminum prices continued to slowly edge downward in April and the first week of May, and the growing dominance of Russian material in LME warehouses remains a bearish risk to LME prices
continued to slowly edge downward, but remained within an overall sideways trend. After prices fell 1.31% throughout April, they dropped an additional 2.22% during the first week of May. But despite the softness, aluminum prices have not yet formed lower lows, so an established downtrend is still not confirmed at this time.Russian Aluminum Now Makes Up Majority of LME Stocks
More than a year after the historic nickel squeeze, the LME continues to face serious problems. The latest issue appears to be the rising presence of Russian aluminum in its inventories. The embattled exchange first noted the issue last fall. Amid a rising number of companies opting to self-sanction and the United States’ decision to impose a 200% tariff , the LME faced a growing number of calls to institute its own ban on Russian materials. Indeed, market pundits, including
, warned that not doing so would lead to the over-presence of discounted Russian material within LME inventories. Left unchecked, this would prevent LME prices from being a reliable global benchmark for aluminum pricing.not to impose any form of restriction in a decision posted in early November 2022. The exchange saw such risks as being largely overstated, noting, “the updated statistics…show there have been no significant moves of this nature.
Should LME prices fall out of line with global prices, it could cause the exchange to rethink its policies. While an outright ban appears unlikely, the LME had previously considered volume limitations to prevent such an outcome. For now, the many perils affecting the LME will continue to benefit other exchanges like the CME.Korean commercial 1050 aluminum sheet prices moved sideways, with a 2.31% rise to $3.85 per kilogram as of May 1.The Korean 3003 coil premium over 1050 sheet increased by 2.
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