Finance
Traders raid LME aluminium stockpiles as shortages loom
Published by Global Banking & Finance Review®
Posted on March 10, 2026
2 min readLast updated: March 10, 2026
Quick Summary
LME aluminium inventories have seen nearly 40% of stocks earmarked for delivery amid soaring backwardation, driven by Middle East shipping disruptions. Inventories are at multi-year lows, pushing spot premiums and regional supply worries higher.
Traders Raid LME Aluminium Stockpiles Amid Global Supply Shortages
Aluminium Inventory Movements and Market Impacts
March 10 (Reuters) - Almost 40% of London Metal Exchange aluminium inventories have been cancelled, or earmarked for delivery out of approved warehouses, as industry sources say the metal could be shipped to countries left short by the closure of the Strait of Hormuz.
Significant Cancellations in LME Warehouses
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Port Klang, Malaysia Activity
A total of 98,150 tons of warranted aluminium - that available for delivery - was cancelled in warehouses in Port Klang, Malaysia on Monday, LME data shows.
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Unclear Motivations Behind Cancellations
It was not immediately clear which entity or entities had made the cancellation or why; the backwardation structure in the market typically attracts metal to the LME.
Market Reactions and Price Movements
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Backwardation and Premiums
Worries about tighter supplies have created a backwardation, or premium along the aluminium contract maturity curve.
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Cash Contract Premiums
The premium for the cash LME aluminium contract over the three-month forward hit a high of $59 a metric ton on Monday, the most since February 2022 in the immediate aftermath of Russia's full-scale invasion of Ukraine.
Stock Levels and Regional Impacts
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Current LME Aluminium Stocks
Total LME aluminium stocks are at 452,375 tons, the lowest since July - and 39.5% of that volume has been marked for delivery out.
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Recent Cancellations in Port Klang
More than 45,000 tons of aluminium were cancelled in LME warehouses in Port Klang last week.
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Middle East Supply Disruptions
Force Majeure Declarations
Gulf smelters Qatalum and Aluminium Bahrain have already declared force majeure to customers as they are unable to ship due to the conflict in the Middle East.
(Reporting by Tom Daly; Editing by Chizu Nomiyama )
Key Takeaways
- •Nearly 40% of LME aluminium inventories are cancelled or marked for delivery, significantly tightening available supply in Port Klang and across LME warehouses (Reuters) (uk.finance.yahoo.com).
- •The backwardated structure—with cash LME aluminium trading at a premium (~$59/t, highest since February 2022)—reflects acute near-term supply constraints amid Gulf shipping disruptions (energynews.oedigital.com).
- •Major Gulf smelters like Qatalum and Aluminium Bahrain have declared force majeure due to disruptions around the Strait of Hormuz, further escalating global aluminium shortages and supply risk (supplystatus.com)
References
Frequently Asked Questions about Traders raid LME aluminium stockpiles as shortages loom
1What percentage of LME aluminium inventories have been earmarked for delivery?
Almost 40% of London Metal Exchange aluminium inventories have been cancelled or earmarked for delivery out of approved warehouses.
2Where did the largest aluminium stockpile cancellation occur?
The largest cancellation occurred in Port Klang, Malaysia, where 98,150 tons of aluminium were cancelled.
3What market condition is currently affecting aluminium contracts?
A backwardation structure has emerged, with a premium on the cash LME aluminium contract over the three-month forward contract.
4How are Middle East conflicts impacting aluminium supply?
Smelters like Qatalum and Aluminium Bahrain have declared force majeure as they are unable to ship due to conflict in the region.
5What is the current level of total LME aluminium stocks?
Total LME aluminium stocks are at 452,375 tons, the lowest since July, with 39.5% marked for delivery out.
