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London Metal Exchange: Base Metal Inventory Update

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LME inventory

In the week ending on November 27, the stock levels of all London Metal Exchange (or LME) base metals fell an average of 1.7%.

Copper stock levels have fallen by 35% since peak in 2015

The stock levels of LME copper fell by 3.6% to 243,350 tons in the week ending on November 27. The peak inventory levels of the year were recorded at 371,250 tons on August 28 and fell by 35.5% since then. Even though the declining inventory levels must support the falling prices, copper prices are not rising due to weak demand from China, the biggest copper consumer. Aluminum, whose inventory levels have been in a steep downtrend since the beginning of 2015, fell 1.4% and reached 2,905,850 tons in the week ending on November 27. Since the beginning of 2015, LME aluminum inventory levels fell by 31%.

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Stock levels of nickel and zinc dropped

The inventory levels of LME nickel dropped by 0.83% last week and reached 411,246 tons. The peak stock levels of LME nickel were recorded at 470,376 tons on June 4, and have dropped by 13% since then. LME zinc stock levels fell by 1% and reached 545,375 tons. The peak stock level of zinc in recent times was 617,325 tons on September 15. Inventory has dropped by 12% since then. The stock levels of lead and tin in LME fell by 3.1% and 0.5%, respectively, in the week ending on November 27.

The falling base metal inventory levels last week gave support to base metal prices. Except copper and zinc, all base metals ended the week in profits. Last week, base metal miners Freeport-McMoRan (FCX), Glencore (GLNCY), BHP Billiton (BHP), and Rio Tinto (RIO) closed in losses, whereas the S&P Metals & Mining ETF (XME) and the PowerShares DB Base Metals Fund (DBB) ended the week in profits.

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