London 07/09/2016 - Shanghai bonded copper stocks hit a four-month low at the end of August while nickel and zinc stocks continued to climb and aluminium stocks were unchanged.
Copper stocks in city's bonded zone fell to 560,000-590,000 tonnes at the end of last month from 580,000-610,000 tonnes a month earlier, according to FastMarkets' survey of multiple warehouse companies.
Metal has either been diverted to the domestic market or has been shipped to LME-listed warehouses in the region, several warehouse contacts said.
"Some of the metals have been earmarked to move to nearby LME warehouse locations... you can see that LME stocks have gone up a lot," a warehouse source said.
Still, metal that has flown out of the bonded zone makes up only a small proportion of stocks that have arrived in the LME system - 157,325 tonnes were delivered to listed sheds in August alone.
For zinc, bonded stocks rose to 117,000-133,000 tonnes at the end of August from 113,000-127,000 tonnes at the end of July, sources said.
"There are mainly inflows of metals into our warehouses and nobody is interested in delivering metals out because the arbitrage between the LME and the SHFE is really unfavourable," a second warehouse source said.
The deliveries are mostly of materiel from Australia and South Korea, the second source added.
Bonded nickel stocks have increased to 74,000-84,000 tonnes from 60,000-70,000 tonnes a month earlier due to the negative arbitrage between the LME and the SHFE.
"[Trading] the arbitrage incurred a loss of more than 1,000 yuan per tonne last month and there is less incentives to move metal into the domestic market," a trading source said.
Aluminium stocks at 27,000-32,000 tonnes at the end of August were down from 32,000-37,000 tonnes a month earlier.
(Additional reporting by Meimei Qin and Perrine Faye, edited by Mark Shaw)