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The aluminum market is facing mounting pressure as October delivery contracts on the London Metal Exchange (LME) continue to trade at a higher premium over November, signaling a supply squeeze. Traders attending the LME Week in London are closely monitoring a standoff in the aluminum market that may intensify in the coming weeks.

Traders stuck in long queues to withdraw aluminum from LME warehouses are facing challenges as they need to roll over hedging positions. Meanwhile, Istim Metals LLC, a warehouse owner, raised an administrative fee, increasing costs for re-registering metal.

A large long position in October contracts, held by Trafigura Group, has further heightened market tension. Complaints from traders to the LME and UK financial regulators suggest the fee hike is worsening the market squeeze. Despite reducing the fee, Istim’s charge remains above industry norms.