Outflows of Indian aluminium boost share of Russian metal in LME warehouses

LONDON (Reuters) -The share of available aluminium stocks of Russian origin in warehouses approved by the London Metal Exchange rose to 65% in July from 50% in June, while the share for Indian origin fell to 33% from 40%, LME data showed on Monday.

On-warrant aluminium stocks in LME-registered warehouses of all origins fell by 23% in July, a second month of decline after a surge in May. Monday's data showed that the majority of the July outflow was of Indian metal.

Russian aluminium stocks on LME warrant - a title document conferring ownership - edged up to 233,775 metric tons last month from 232,350 in June, the data showed. Stocks of Indian origin fell to 119,575 tons from 188,800 tons.

The May surge in stocks followed a decision by the LME to ban all Russian aluminium, copper and nickel produced from April 13 from its system to comply with U.S. and British sanctions imposed over Russia's 2022 invasion of Ukraine.

Most of the May inflow in aluminium inventories was seen into LME-registered warehouses in Malaysia's Port Klang, as, according to sources, trading houses and warehouse operators arranged lucrative financial deals known as rent-sharing which often result in a queue to load out the metal.

Separate LME data showed on Monday that for one warehouse operator, ISTIM UK Ltd, the load-out queue for aluminium from Port Klang got longer, reaching 280 days in July versus 253 days in June and zero days in April.

The share of Russian-origin copper stocks fell to 21% in July from 27% the previous month, the LME said, while Chinese copper's share rose to 53% from 45%. China's June refined copper exports jumped amid high global prices.

Meanwhile the share of Russian nickel in LME facilities fell to 24% from 27%, with the amount steady at 24,360 tons in July. LME nickel stocks of Chinese origin meanwhile rose to 35% of the total from 28%.

The LME has been building up the liquidity of its nickel contract by attracting new listed brands, including those from China and nickel mining giant Indonesia, which got the first LME approval for one of its producing brands in May.

Indonesian nickel was added to LME stocks for the first time in July, the data showed, making up 1.5% at the total, or 1,512 tons.

(Reporting by Polina Devitt; Editing by David Goodman and Jan Harvey)

By Polina Devitt