More than half of aluminium in LME warehouses produced in Russia

LONDON, April 11 (Reuters) - The share of Russian aluminium stocks in warehouses registered with the London Metal Exchange (LME) climbed to 53% of the total in March, or 220,575 tonnes, from 41% in January, data on the exchange's website showed on Tuesday.

The data suggests that consumers in industries ranging from transport to construction and packaging continue to shun Russian metal.

"Companies in Europe and in some parts of Asia do not want Russian aluminium. They may have contracts so they will take it, but they will not use it and instead deliver it to the LME," an aluminium industry source told Reuters.

The world's oldest exchange and largest market for industrial metals has not banned Russian metals from being traded and stored in its system since Moscow invaded Ukraine, as there are no Western sanctions on Russian base metals.

It, however, suspended the inflow of Russian metal into its U.S. registered warehouses from late February after the United States announced import tariffs on Russian metal.

These U.S. import tariffs have further complicated the use of Russian aluminium produced by Rusal , which already had some self-sanctioning consumers.

Commodity trader Glencore (GLEN.L), which has a multi-year contract with Rusal, deposited tens of thousands of tonnes of Russian aluminium in LME-registered warehouses in Asia in recent months, sources with knowledge of the matter have told Reuters.

Glencore said in February that "there is nothing abnormal" about these deliveries and that its contract with Rusal would expire in the second half of 2024.

The rising share of Russian aluminium in warehouses "appears to have happened in a market which faced seasonal oversupply, as indicated by rising inventories (not only on the LME but also along the value chain)," said Julius Baer analyst Carsten Menke.

Overall LME aluminium stocks are up 85% since early September to 512,725 tonnes, inflating the discount for the cash over the three-month aluminium contract to the current $43.5 a tonne.

The LME report also showed that as of March 31, the share of Russian copper stocks fell to 49% from 94% in January, or 22,275 tonnes, while nickel rose to 21% from 16%, or 8,058 tonnes.

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Thomson Reuters

Senior commodities correspondent in Russia writing about metals and mining, agriculture and other commodities

Iron Ore Company of Canada, which is majority owned by Rio Tinto , said on Tuesday that it had temporarily halted operations at its Qubec mine following wildfires.