LME Aluminum Inventory Now at a 2-Year Low

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Aluminum rose on the London Metal Exchange today, heading for the longest-ever run of monthly advances amid shrinking supplies.

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Aluminum for delivery in three months climbed 1.7 percent to $2,117 a ton by 12:40 p.m. today on the LME after earlier touching $2,119.50, the highest since February 2013. Prices are up 18 percent this year.

Inventories of aluminum tracked by the LME are at a two-year low. The metal for immediate delivery settled yesterday at a premium to the contract for delivery in three months for the first time since December 2012, a sign of limited supplies. The premium widened to $4.25 a metric ton today. The fee to borrow the lightweight metal for one day jumped to $10 a ton yesterday, the highest since December 2012.

The 3-month price of aluminum experienced the biggest price decline of the day, dropping 0.1 percent on the LME to close at $2,086 per metric ton on Thursday, August 28. The cash price of primary aluminum saw little price change on Thursday on the LME at $2,082 per metric ton. After a couple of days of improving prices, the Indian aluminum cash price held steady at INR 126.50 ($2.10).

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Chinese aluminum prices closed flat for the day. The price of Chinese aluminum scrap saw essentially no change for the fifth day in a row, remaining around CNY 12,250 ($1,988) per metric ton. For the fifth day in a row, the price of Chinese aluminum billet remained essentially flat at CNY 13,590 ($2,205) per metric ton. The price of Chinese aluminum bar saw little movement at CNY 14,200 ($2,304) per metric ton. The Chinese aluminum cash price saw essentially no change for the fifth day in a row, remaining around CNY 13,960 ($2,266) per metric ton.

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