MI aluminium stocks analysis: Shanghai up trend broken

Stocks of primary aluminium registered with the Shanghai Futures Exchange (SHFE) fell by 3,922t to 47,485t in the week to Thursday, breaking a five-week up trend in the headline figure. SHFE stocks are still showing a year-to-date increase of 28,903t but that somewhat masks the fact that they are well off the year’s highs close to the 100,000t mark registered just after the Lunar New Year holidays in February. LME stocks also fell yesterday, reversing Wednesday’s small gain. Singapore, which has accounted for just about all the “in” side action in recent weeks, saw no deliveries at all yesterday with inflow shifting to Detroit. That allowed the headline figure to fall with draws remaining steady. However, once again fresh cancellations lagged and cancelled tonnage in the system has fallen to its lowest level since late May, suggesting a pending slowdown in the draw rate.