Japanese port stocks down slightly in September

Stocks of primary aluminium held at Japan's major ports totalled 221,900t at the end of September, according to estimates from local trade house Marubeni.

That represented a 2.7% decline from stocks of 228,000t at the end of August and a 1.9% decline from stocks of 226,300t at the end of September 2006.

The month-on-month shift was marginal and, as the chart shows, Japanese port stocks continue to hold in a broad 200,000-250,000t range, which has been in place since the early part of 2006.

This stability of inventory reflects a broad stability in the local market. Although mill shipments of product--an approximate gauge of actual consumption--trended lower in the early part of this year, they have bucked that trend in the two most recent reported months—July and August—registering small year-on-year increases.

Japanese buyers tried to aggressively talk down the Q4 premium levels for good western brand metal, citing disappointing demand and comfortable stocks. In the end the quarterly premium slipped only marginally to $65-66/t over LME cash from the Q3 level of $68-69/t.

Going forward, Japanese premiums are more likely to reflect shifts in the regional market-place—slowing Chinese exports—than domestic market conditions, unless these change significantly over the next two months.
Factoring the Japanese stock figures into our global reported stocks calculations for September shows a net build of 95,455t with only producer inventories now missing. (They will be released by the International Aluminium Institute on Oct 26.)

Most of that increase took place on the LME, where registered stocks rose by 97,775t over the course of September.