MI aluminium stocks analysis: LME lower as inflow abates

LME-registered stocks of primary aluminium fell by a net 5,275t last week after two prior weeks of substantial net rises. The headline figure has retreated from its recent 2007 highs (838,275t on July 12) but only marginally so. Last week’s turnaround was largely due to a drying-up of “in” side activity. Singapore saw no arrivals after very steady inflow over the previous weeks, while fresh warranting at Johor came to an end on Wednesday after the Malaysian location had received 3,050t in the first part of the week. The only other inflow in the system was limited to small tonnage at Baltimore (325t) and Detroit (300t). However both locations, together with New Orleans and St Louis, saw daily draws. US locations lost 2,725t last week and “out” side activity looks set to remain robust since they also accounted for 5,575t of the week’s 8,375t of fresh cancellations. Most of those came on Friday itself. Fresh cancellations had been extremely subdued up to then and that was starting to exert a braking influence on an already subdued draw rate. Despite Friday’s fillip, cancelled tonnage remains low as evidenced by a ratio of cancelled tonnage at 3.0%.