Stocks of primary aluminium registered with the Shanghai Futures Exchange (SHFE) rose by 1,523t to 23,955t in the week to Thursday.
There are signs that SHFE stocks are bottoming out, albeit at a low historical level, after the steep slide from the early-March peak at 99,377t. It may be a case of "watch this space", given a number of anecdotal reports that demand in China is slowing, both on seasonal factors and in response to the government’s clamp-down on the preferential treatment of exports of "product".
On the LME, meanwhile, draw rates improved a bit Thursday thanks to an acceleration in movement at Trieste, where 17,725t is on the move. A total 7,400t have been drawn down with 10,325t still sitting in the cancelled category at this Italian location.
That’s still the largest concentration of cancelled tonnage in the system, followed by Singapore, which holds 6,850t of cancelled warrants, so these two are going to determine the pace of overall "out" rates in the coming days.
Fresh cancellations yesterday were a non-descript 1,050t and the ratio of cancelled tonnage eased further to 3.5%.
Trieste yesterday lost 60t of A380 ingot. That, combined with Wednesday’s 600t of "reverse cancellations" has left just 20t of cancelled tonnage at the Italian location, suggesting little scope for further departures in the coming days.
That big hit on the cancelled tonnage Wednesday was only partly offset by the cancellation Thursday of 100t of DIN226 ingot at Singapore and relatively low cancelled tonnage in the system is now going to constrain "out" side activity.
After one day’s interruption the downtrend in LME-registered stocks of NASAAC resumed with full force Thursday. Baltimore lost 240t, Detroit 60t and Owensboro 580t (all small sow). The east coast location also saw 80t of ingot cancelled and there is still plenty of cancelled metal awaiting draw to fuel the downtrend further.
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