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A Moon Shot? November 22nd, 2019 by John Gross

Over the past two weeks, inventories of aluminum held in LME warehouses rose some 237,225 metric tonnes, or 25% to 1.18 million mt on Friday.

No need to go into how so much metal ‘moved’ into warehouses in such a short period of time, we’ve gone through the exercise enough that it isn’t worth repeating.

Nevertheless, we do hope the LME will address this market distorting issue.

What is interesting to note however, is that if the 237,225 mt were fed into a melting furnace, which in turn fed into a continuous casting machine making 3/8” aluminum rod, it would equate to roughly 762,700 miles of said metal.

As a point of reference, the distance from planet earth to the moon is about 238,900 miles.

Thus, we are looking at a trip to the moon and back, and then some.

As for other nonferrous metals, it looks as if they were just marking time last week, except for nickel and zinc, both of which were hit pretty hard again.

In the copper department, our friends at the International Copper Study Group report that global production of refined copper rose just 9,000 mt to 15.924 million mt during the first eight months of 2019, as compared to 15.915 mmt last year.

Consumption increased 70,000, or 0.4% to 16.254 mmt, resulting in a deficit of 330,000 mt in the January to August period. This represents a 62,000 mt widening of the deficit from -267,000 mt last year.

Precious metals were mixed on the week, but remain in positive territory on a year to date, and year over year basis.

The energy markets continue to warrant attention – while there was a fair amount of back and forth motion in crude oil last week, it did break through overhead resistance, and is not far from testing its previous high in the $58 area.

Crude is also up year to date and yr/yr, and is the third best performer after palladium and nickel thus far this year.

Regards,
John


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