Reuters reported that a first glance at aluminium stocks suggest an abundance of the metal, but analysts say a closer look at how long those stocks would last shows the market is tight and prices are too low. Benchmark aluminium on the London Metal Exchange at around USD 2,000 a tonne has fallen more than 10 percent since hitting a 3-1/2-month high at USD 2,267 in early October.

The price drop coincides with receding nervousness about supplies of alumina, used to make aluminium, and an extension of the deadline for customers of Rusal, which is under US sanctions, to wind down business with the Russian producer.

Mr Eoin Dinsmore, an analyst at metals consultancy CRU said that “There isn’t an absolute conviction the aluminium market is tight, inventories have put a dampener on prices.”

CRU estimates total global aluminium stocks of 11 million tonnes by the end of this year.

Mr Dinsmore said that “That’s about 61 days of global consumption and the lowest since 2007 when stocks dropped to 50 days. Anything below 60 days is a tight market, we will drop below 50 days by 2020.”

The downtrend can be seen in stocks in LME approved warehouses, which have more than halved to 1.05 million tonnes since the start of last year.

Wood Mackenzie analysts expect aluminium supplies at nearly 68 million tonnes this year rising to 72 million tonnes in 2019, with about 2 million tonnes of the rise coming from China and the remainder from the rest of the world.