Official inventories of aluminum, copper, and zinc are on the decline as global production moves in and out of the “shadows”. MetalSignals by RS Metrics captures these movements through its unique patented process.
We often get the question @RSMetrics: “what are you actually measuring with MetalSignals?” The answer lies in the shadows, or at least, in the shadowy off-warrant and unbonded warehouses of the world’s base metal supply chain.
Historically, base metal prices maintained a strong relationship to the change in inventory of metal stocks stored at exchange-approved warehouses used by the London Metals Exchange (LME) or Chicago Mercantile Exchange (CME). These are commonly known as “on-warrant” storage facilities. However, as market participants and volumes have become increasingly global in recent years, growth in “off-warrant” facilities has increased as well, contributing to a distortion of the relationship between metal price and the official on-warrant inventory levels of any single exchange.