Last week Hotline made the point that the accumulation of the near-record volumes of aluminium in London Metal Exchange sheds has had less to do with hoarding and profiteering on the part of warehouse-owning banks, and more to do with the collapse in demand seen at the start of the financial crisis.

Aluminium consumers are right to take issue with the fact that the rising stocks have not corresponded with better spot availability on the LME, but if they feel hard done by, they might spare a thought for consumers in the indium market.

The Fanya exchange in Yunnan, China, holds nearly 1,400 tonnes of indium in four private warehouses, which is equivalent to two years’ worth of global primary output.

By contrast, the near-record LME aluminium stocks would serve global demand for a little more than six weeks.

And while aluminium consumers are being slightly artful when they say that the inability to get at LME stocks has inflated their purchasing costs, for indium consumers prices really are rising as a result of the stockpiling on the Kunming Fanya Metal Exchange.

Indium prices quoted on Fanya are typically twice as high as they are in the global physical market, and they have been rising strongly in defiance of the daily arrivals of stock on the bourse.

As a result, Chinese producers have been diverting the lion’s share of their output to Fanya warehouses, while some have also been bidding on overseas material for the same purpose, perversely turning China, which supplies 60% of the world’s indium, into a net importer of the metal.

So while a few Chinese producers are making hay on Fanya, consumers have become involved in an increasingly desperate scramble for material, which is pushing global indium prices comfortably above $600 per kg, to their highest level since late 2011. That scarcity pricing flies in the face of the largest surplus the indium market has ever seen, and one that would be unimaginable in a larger market such as aluminium.

For aluminium consumers, Detroit is finally getting the attention it deserves; indium consumers will feel that Kunming should too.