Are the cracks beginning to show in the gravity defying aluminum market or is this just a welcome pause for breath? The LME price has continued to rise in spite of well over a million tons of available stock in exchange warehouses plus another 3.2 million tons in the same warehouses but tied up on long term financing deals for the next 9-10 months (although what happens at the end of the period has not been widely discussed). The price is now $1800/ton and the LME ” SHFE arbitrage window is firmly shut. Chinese traders are said to be trying to delay deliveries of some 100,000 tons of metal due to arrive this month and are beginning to resell stocks already in warehouse in China according to Reuters. There is only one reason they would do this. They don’t see it as advantageous to hold onto the metal any longer. The importers looking to delay arrival realize the market is probably saturated at the moment. With increased domestic production and good but stable domestic consumption new deliveries are not going to be consumed anytime soon. The article estimates some 700,000 tons is already sitting in bonded warehouses in China and some traders are beginning to re-sell holdings to reduce their exposure. At this level we could expect to see more capacity brought back on stream as more producers see an admittedly thin profit to be made. More metal coming onto the market would puncture the artificial scarcity the producers are currently maintaining. It would not take much of a turn in sentiment for the price to begin to slip back and indeed a third quarter retrenchment has been muted from several quarters. Now may not be a good time to place resting orders or placing contract prices unless they are linked to an index for aluminum deliveries in the second half.