RE:RE:RE:RE:RE:On-warrant inventoriesThat is a simplistic but correct interpretation.
When you compare world annual zinc production of approx. 11.2 million tonnes p.a. With today's LME stocks of approx. 330,000 tonnes, LME warehouses hold only about 3% of annual production. Laying too much emphasis on day-to-day movement in LME inventories is not prudent. Most of the world production never reaches LME warehouses. It is sold directly by producers to users. Most of the warrants for inventory in LME approved warehouses exchange hands multiple times before they are cancelled. Any producer/trader can manipulate LME inventories, and thereby Prices, by adding or reducing the warrants. For example, for inflating/deflating LME inventory by 11,000 tonnes, a producer/trader just needs to reduce/increase his own warehouse inventory by same amount (which is hardly 0.1% of annual zinc production) and make a substantial impact, maybe $0.10 per lb in the price of zinc.
Therefore, in my view, one should view at least 3 months movement of LME stocks to determine the change, if any, in production vs consumption.