Metal stored in London Metal Exchange warehouses climbed above 5 million metric tons the first time ever Tuesday.
“In principle, this is probably due to reshuffling of existing material that was previously held outside the exchange-registered warehouses and has now been transferred to them, thus making it visible,” the bank addded.
Nevertheless, analysts say production in China also rose again recently despite lower prices and higher energy costs. The National Bureau of Statistics says December output expanded by around 15% year on year.
“This is likely to be only a temporary measure, however; we expect the next few months to bring further or new cuts in production because many Chinese aluminum smelters are operating at a significant loss despite the latest price rise--aluminum has climbed to a 2½-month high of over $2,200 a ton,” Commerzbank concluded.
