SINGAPORE--Aluminum stocks at major Japanese ports were down 12.6% on year at the end of February, reflecting the tighter aluminum market in 2007, a trader at Marubeni said Thursday.
February stocks rose just 1.1% on month to 245,900 metric tons, while year-ago stocks stood at 281,300 tons.
The on-month rise isn't significant but does contradict the seasonal trend for this time of the year, said a trader in Tokyo.
"Usually everyone wants to reduce stocks at the end of the financial year," she said. Japan's financial year ends on March 31.
The trader attributed the increase more to shipping logistics rather than market fundamentals. Aluminum stocks at the port in Yokohama, which accounted for most of the stock increase, jumped 10.7% on month mostly because a large ship arrived at the port, she said.
She added stocks may also have risen because Japanese consumers postponed purchases as cash prices at the time were much higher than forward prices on the London Metal Exchange.
Stocks at the end of March may increase again for the same reason, she said. While the backwardation on the cash to three-month LME contract narrowed in the past two weeks, that trend is reversing.
"At the moment the LME price is lower than in January and February, but because the price is coming back into backwardation prices may go up and then the port stocks will go up."
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