(Bloomberg) -- Stockpiles of metals including aluminum and nickel tracked by the market’s biggest exchange fell again, stoking worries about tighter supplies that recently sent prices rallying. 

The rapid drawdowns in freely available inventories are lending support to metals, even as traders mull the knock-on consequences for manufacturers as the Federal Reserve prepares to hike interest rates to rein in inflation. Base metals futures were mixed on Thursday, after a jump on Wednesday that pushed the London Metal Exchange’s price index to the highest since October.

On-warrant aluminum inventories -- those accessible for withdrawal -- in LME warehouses touched a fresh 16-year low, with rising orders for metal in Asia driving the drop. Nickel stockpiles continued a sharp decline, adding to concerns the market is heading for a historic supply squeeze. 

Metals prices have climbed lately as production outages and smaller inventories revive worries about global supplies of materials crucial to manufacturing and the green-energy transition. Supportive factors also include an energy crisis that’s hitting zinc and aluminum production in Europe and a potential export tax on some nickel products from Indonesia.

Market moves were more muted Thursday as investors continued to digest Wednesday’s U.S. inflation data, which showed consumer prices soared last year by the most in almost four decades.

Copper on the LME fell 1% to settle at $9,958.5 a metric ton by 5:53 p.m. in London. Aluminum was down 1% and nickel up 0.5%. 

©2022 Bloomberg L.P.