MI aluminium stocks analysis: Cancelled tonnage sliding

LME aluminium stocks movements Wednesday were neutral with continued inflow at Singapore being offset by modest draws there and elsewhere. Draw rates have appreciably slowed over the last couple of days, which is a reflection of sliding cancelled tonnage in the system. Once again it is starting to look very low, as is the ratio of cancelled tonnage at 2.7%. What is there is largely concentrated on four locations, which are seeing consistent—but modest--“out” side activity. Singapore holds 7,475t of cancelled warrants, Detroit 3,875, Trieste 2,975t and Baltimore 2,750t. Without fresh cancellations in bigger quantities, the cancelled pipeline is going to continue emptying, which will see draw rates slow further in the days ahead. That has implications for the headline figure for as long as metal continues to flow onto LME warrant at Singapore.