MI aluminium stocks analysis: Back up towards 07 highs

LME-registered stocks of primary aluminium rose by a net 4,500t last week, mostly offsetting the previous week’s net 5,275t fall and leaving the headline figure close to the 2007 high of 838,275t recorded on July 12. Fuelling the turnaround was the resumption of warranting activity after one week’s break at Singapore, which last week received 6,775t. Other Asian locations were in action—Johor receiving 1,000t and Pusan 1,500t—in a continued displacement effect of high Chinese exports of “product” in recent months. There was scattered inflow at US locations but the balance of activity here was towards the “out” side with Baltimore, Detroit and St Louis all losing metal on a daily basis. Draws generally were steady last week as relatively robust cancellation rates of the two previous weeks got worked off. Fresh cancellations dropped a gear to 5,425t last week and the overall ratio of cancelled tonnage slipped to 2.9%, which suggests that low cancelled tonnage is going to keep a lid on “out” rates in the coming days.